On dec. 23, owners given a distribution of $11.46.Must I pay taxes on it? bought stock on dec 22.

Dusty answered 8 months ago …

There is a thing called an "Ex-dividend Date." Usually the company or agency issuing the stock will announce the dividend on a specific date, either the day the announcement is actually made or the date each month or each quarter the announcement is made for repetitive dividends. The announcement of the dividend will state the "Ex Dividend" date and the date of payment. The statement will read that "Owners of record on XXX will be paid a dividend of $YYY on ZZZ." The XXX (Ex Dividend) date will be several days or even several weeks before the date of payment (ZZZ).

Before April15 of the following calendar year the persons or corporate entities who were paid those dividends will be sent a Form 1099 describing the money paid and what tax categories were used in the calculations. If you did not see a cash payment in your brokerage account or otherwise receive payment of the dividend then you were not paid that money. If you were paid that money you should also by now have received a Form 1099 via mail describing that payment so that you could properly calculate and file your tax return. If you did not see any money and did not get a Form 1099 you did not get paid that dividend and are not responsible for paying the tax.

Note that the other side of this coin is to sell the shares after the Ex Dividend date and receive dividend payment on shares you no longer own; then you are responsible for the taxes on that money.

In the case of Mutual Funds it is possible to buy shares after dates when payments were made and be responsible for taxes on money paid to other persons. This will usually happen at or near the end of the calendar year. The person or agency responsible for the taxes should still receive appropriate documents from the Fund stating the amounts of money and other details for calculation of taxes.

If you are having problems with all this, have not filed your return, file a request for an extension immediately and turn your tax problems over to a CPA. Avoid agencies and chains like H & R Block, et al.