The recipient of a taxable stock dividend includes the value of the stock received in gross income and that amount becomes the basis for the stock received.

Question

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When a taxable stock dividend is received, the value of the stock received is included in gross income and becomes the basis for the stock received, as per the provisions of the Internal Revenue Code. This basis is important in determining the gain or loss on the sale or disposition of the stock in the future.

The Recipient of a Taxable Stock Dividend Includes the Value