Miranda owns shares in Oak Corporation. In 2018, the company paid a stock dividend, and Miranda received one dividend payment for each share of stock owned. The distribution did not involve any shares of preferred stock, and Miranda did not have a choice to receive cash or other property instead of additional shares; nor did any of the other shareholders. Choose the response that best describes how Miranda should report this distribution. As ordinary dividend income reported on Schedule B, Interest and Ordinary Dividends. As qualified dividend income reported on Schedule B, Interest and Ordinary Dividends. As a return of capital reported on Schedule D, Capital Gains and Losses. The distribution is non-taxable, and Miranda does not need to report it.

Question

Donavan Mckinney

Business

1 September, 19:54

Miranda owns shares in Oak Corporation. In 2018, the company paid a stock dividend, and Miranda received one dividend payment for each share of stock owned. The distribution did not involve any shares of preferred stock, and Miranda did not have a choice to receive cash or other property instead of additional shares; nor did any of the other shareholders. Choose the response that best describes how Miranda should report this distribution. As ordinary dividend income reported on Schedule B, Interest and Ordinary Dividends. As qualified dividend income reported on Schedule B, Interest and Ordinary Dividends. As a return of capital reported on Schedule D, Capital Gains and Losses. The distribution is non-taxable, and Miranda does not need to report it.

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Madyson Shannon · Answer 1

D. The distribution is nontaxable, and Miranda does not need to report it

This is a non-taxable expense from Oak to Miranda, with no tax penalties until she sells the portions.

This is neither an regular dividend nor a competent dividend. The latter ascends only when the said portions are held for so long as to appeal lower long-term capital gains.

This cannot be described in Schedule D as neither capital expansion nor loss is tangled as no sale has taken place.