Do ordinary cash dividends affect stock cost basis ?

[Audy [John 6:54]]

Can anyone tell me if after holding a stock for a couple of quarters and
receiving ordinary cash dividends to what extent if any does it affect the
figuring of the stock cost basis. For instance...

Stock ABC bought at $10718.00

and I received ordinary dividends on two separate occasions for $50.00 where
these ordinary dividends are reported on a 1099-DIV

thanks,
(e-mail address removed)

 

[Paul A Thomas]

Can anyone tell me if after holding a stock for a couple of quarters and
receiving ordinary cash dividends to what extent if any does it affect the
figuring of the stock cost basis. For instance...

Stock ABC bought at $10718.00

and I received ordinary dividends on two separate occasions for $50.00
where
these ordinary dividends are reported on a 1099-DIV

If you received the dividends, as in they cut you a check, then there is NO
impact to your cost basis.

If the dividends were reinvested, then that is treated as a purchase, and
your cost basis for the entire holding changes, as you purchased some more
shares.