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Dividends: Tax consequences of dividends paid in property, not cash

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We think of dividends as being paid out in cash. After all, most dividends that people receive from investment in corporate stocks are traditionally paid in cash. However, do they have to be paid out in cash? If they are not, does the payment of these dividends in other property potentially cause different tax consequences to the shareholder and/ or the corporation? If so, how?

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The expert examines tax consequences of dividends paid in property.

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No, dividends do not have to be paid in cash (www.ehow.com). Dividends can be paid in stocks and property (called property dividends), such as shares of stock from another company (that the company owns) or the company's products (www.ehow.com). Property dividends are taxable at its ...

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