7508. What is a “stock dividend”?Nuco Employeercline202014-06-26T17:40:00Z2014-06-26T17:40:00Z1139795Summit Business Media6193314Site Map/Investments/Stocks/Dividends/Stock DividendsTaxFactsDefaultArticle2007-01-30T00:00:00Z120391008-00-tf2.xml1008.00;#1968;#0x010100C568DB52D9D0A14D9B2FDCC96666E9F2007948130EC3DB064584E219954237AF3900242457EFB8B24247815D688C526CD44D009C4E67E972694125ABDA91AC61F5E51FTax Facts 2What is a “stock dividend”?
37600.0000000000TaxFactsDefaultArticle2010-01-14T22:51:31ZSBMEDIA\moss-admin7508. What is a “stock dividend”?A stock dividend is a dividend paid in shares of stock of the distributing corporation to its shareholders with respect to its outstanding stock. A distribution of stock to compensate the recipient for services rendered, for goods provided, or in payment of a debt is not made with respect to the distributing corporation’s outstanding stock and, therefore, is not a stock dividend.IRC Sec. 305(a); Treas. Reg. §1.305-1.A distribution of stock warrants (or other rights to acquire stock of the distributing corporation) is treated in the same manner as a stock dividend so long as the distribution of such warrants is made with respect to the corporation’s outstanding stock (and not as compensation for services, etc.).See IRC Sec. 305(d); Treas. Reg. §1.305-1(d).A distribution of stock of the distributing corporation made with respect to outstanding stock rights or convertible securities of that corporation to the owners thereof will also qualify as a stock dividend.IRC Sec. 305(d).