Systech offered its stockholders a choice between stock and cash for their annual dividend. Since Carol has chosen stock, she does not have to include the dividend in income.

Question

Quizplus · Accepted Answer

Regardless of the form in which a dividend is received (stock, cash, property), it is generally considered taxable income and must be reported as such on the recipient's tax return. Choosing to receive the dividend in stock instead of cash does not exempt it from being included in income.

Systech Offered Its Stockholders a Choice Between Stock and Cash