Stock dividends are always tax-free to the recipient shareholder.

Name: Stock dividends are always tax-free to the recipient shareholder.
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Stock dividends are not always tax-free to the recipient shareholder. The tax treatment of stock dividends depends on the type of dividend and the tax laws of the country in which the shareholder is located. In the United States, for example, stock dividends are generally taxable as ordinary income, although qualified dividends may be eligible for lower tax rates.

Stock Dividends Are Always Tax-Free to the Recipient Shareholder