Would the shares acquired by stock dividends have a shorter holding period than the original shares purchased?
Yes, if they were taxable stock dividends, the holding period begins on the date the new shares were distributed by the corporation. For nontaxable stock dividends, the holding period is the same as the underlying stock. When you purchase additional mutual shares with reinvested dividends, the dividends are generally taxable. You thus have a holding period starting on the date of the transaction, as reported in your statements, just as you do for shares that you purchase outright.
Related Questions
- Does the holding period for new shares I received as a result of a stock split start on the purchase date of the original stock or on the date of the stock split?
- Would the shares acquired by stock dividends have a shorter holding period than the original shares purchased?
- What are the qualified dividends holding period requirements?
