Any dividend declared, with the option of receiving cash or additional common stock, qualifies for the stock dividend exclusion if stock instead of cash is selected.

Question

Quizplus · Accepted Answer

The stock dividend exclusion typically refers to the tax treatment of dividends where stock dividends are not taxed as income unless the shareholder has the option to receive the dividend in cash or other property. The choice between receiving cash or additional stock does not automatically qualify the dividend for exclusion; tax treatment depends on specific tax laws and regulations.

Any Dividend Declared, with the Option of Receiving Cash or Additional