08-21-2013, 10:10 AM
Other things to consider as far as advantages of stock dividends:
1. Generally a stock dividend is not taxable unless it has a cash dividend option attached. A pure stock dividend is not taxable as opposed to a cash dividend which is not deductible by the company but is taxable to the receiver. Double taxation and cash used
2. The overall value of the corp remains in the hands of the same shareholders. The stock price tends to reduce proportionally but the overall value is the same (this is where it's like a mini-split).
3. The receiver of the stock dividend has a choice; he/she can retain the shares tax free, or can sell the dividend shares to pocket cash (less taxes). For this reason some feel that the stock dividend is the best type of dividend.
Is IOC management is reading this thread, whadya say?
1. Generally a stock dividend is not taxable unless it has a cash dividend option attached. A pure stock dividend is not taxable as opposed to a cash dividend which is not deductible by the company but is taxable to the receiver. Double taxation and cash used
2. The overall value of the corp remains in the hands of the same shareholders. The stock price tends to reduce proportionally but the overall value is the same (this is where it's like a mini-split).
3. The receiver of the stock dividend has a choice; he/she can retain the shares tax free, or can sell the dividend shares to pocket cash (less taxes). For this reason some feel that the stock dividend is the best type of dividend.
Is IOC management is reading this thread, whadya say?