tag:infinitekind.tenderapp.com,2009-01-14:/discussions/investments/7394-how-to-record-a-stock-dividend-non-cashInfinite Kind: Discussion 2023-04-07T05:40:19Ztag:infinitekind.tenderapp.com,2009-01-14:Comment/574411622023-01-05T18:25:53Z2023-01-05T18:25:53ZHow to record a Stock Dividend (non-cash)<div><p>Easy. DivReinvest with zero shares and the amount the value/cost basis has increased by</p></div>Stuart Beesley (Mr Toolbox)tag:infinitekind.tenderapp.com,2009-01-14:Comment/574411622023-01-05T21:49:44Z2023-01-05T22:29:05ZHow to record a Stock Dividend (non-cash)<div><p>Not the best written explanation I've ever seen a company write.</p>
<p>So I suggest working backwards, what, if anything, did you receive from the company, New shares? Money?</p>
<p>What Stuart has described is what you can do if only the cost basis of the shares has changed and you did not receive any new shares or money.</p></div>dwgtag:infinitekind.tenderapp.com,2009-01-14:Comment/574411622023-01-05T22:08:05Z2023-01-05T22:08:05ZHow to record a Stock Dividend (non-cash)<div><p>Errr. Not quite. If the increase is increasing the cost basis (eg accumulation funds) then divreinvest zero shares will correctly increase the cost basis, record the dividend against the div category and not change the qty of shares??</p></div>Stuart Beesley (Mr Toolbox)tag:infinitekind.tenderapp.com,2009-01-14:Comment/574411622023-01-05T22:28:42Z2023-01-05T22:28:42ZHow to record a Stock Dividend (non-cash)<div><p>The pesky word "not" slipped in it should read if "only the cost basis of the shared has changed". Fingers have a mind of their own.</p>
<p>Post edited.</p></div>dwgtag:infinitekind.tenderapp.com,2009-01-14:Comment/574411622023-01-05T23:55:46Z2023-01-05T23:55:46ZHow to record a Stock Dividend (non-cash)<div><p>Sorry, i'll give you two more information.<br>
This was a non-cash dividend, I was awarded a percentage of total shares held as a Dividend. So in one account I received 6.8 shares and no cash except that I had to immediately liquidate the 0.8 shares. The .8 shares are shown to have the acquired date for the stock and an adjusted cost based on the original basis.</p></div>kking18474tag:infinitekind.tenderapp.com,2009-01-14:Comment/574411622023-01-06T04:50:57Z2023-01-06T04:50:57ZHow to record a Stock Dividend (non-cash)<div><p>Well, there's no such thing as a free lunch to the tax man, so very probably these should affect the cost basis? Thoughts?</p>
<p>Thus, even though you received shares, the tax man might deem this as Income, Dividend, something, even though the vehicle was shares? If so, then DivReinvest would still do this for you. Perhaps as well as the share qty, you can detail the cost basis movement(s) that need to occur from this txn?</p>
<p>Other thoughts. If you insist that there is no cost basis movement, and no deemed income/dividend (the fact that no cash was received is irrelevant) then you could just BUY 6 shares for £0.01 (who cares about the 0.8 shares) and then MiscExp £0.01 of cost basis away to a junk category.</p></div>Stuart Beesley (Mr Toolbox)tag:infinitekind.tenderapp.com,2009-01-14:Comment/574411622023-01-06T05:35:46Z2023-01-06T05:35:46ZHow to record a Stock Dividend (non-cash)<div><p>I've never known the tax man to forgo income, either now, in the future, or both.</p>
<p>An in-speccie distribution of shares is not unusual, but the value of the shares/dividend is considered income in the current tax year. So treating it as a dividend and buy or a DivReinv is pretty normal.</p>
<p>Another way I have seen them do it is via a capital return on the existing shares thus lowering their cost basis and using those "funds" to purchase the new shares.</p>
<p>Depending on tax laws I suppose the shares could be considered a gift then the value of those is a tax free receipt and that amount is used in the purchase to set up the correct cost basis via a buy of the new shares.</p>
<p>Tax lays and how a transaction is structured from a tax perspective often determines the way to treat a transaction.</p></div>dwg