Stock Market Help?

Question

Quick Question, Do Stocks That Pay Dividends, When that Check Comes? Does That Count As Unrealized Income? If Not, Explain What Would

Answer 1

Cash the check and it is realized.  Unrealized means has not been added to the benefit of your account unless you are doing a forward sale.

A forward sale occurs when a stockholder agrees to sell shares in a corporation at a future date in exchange for payment now. The number of shares that will be sold will depend on the stock price at that time, within a specified range. This is effectively a form of hedging, akin to bracketing the transaction with puts and calls to limit risk. In the meantime the stockholder retains the voting rights, gets cash now to diversify their portfolio, and doesn't have to report the transaction as a sale (possibly affecting the stock price).

Answer 2

Dividends are treated as dividend income.   There is a line on your tax form 1040 for dividend income.  It is always realized.

When a dividend is paid one of two things will happen.  It will be deposited to your brokerage account.  Or if you have a DRIP it will be used to by more shares.  In either case it has been paid and must be declared as income.  What you do with it doesn't matter.

Depending on how long you held the stock, dividends are "qualified" or "unqualified."   Qualified dividends are taxed at a lower rate.  You must have held the stock for at least 61 days for it to be qualified.  Some dividends (such as REITs) are always unqualified.