XYZ declared a $1 per share dividend on August 15 The date of record for the dividend was September 1 (the stock began selling ex dividend on September 2) The dividend was paid on September 10 Ellis is a cash method taxpayer Determine if he must include the dividends in gross income under the follo...

a Ellis has 100 of economic income and includes the 100 dividend in gross income b ...

XYZ declared a $1 per share dividend on August 15. The date of record for the dividend

Question:

XYZ declared a $1 per share on August 15. The date of record for the was September 1 (the stock began selling ex-dividend on September 2). The was paid on September 10. Ellis is a cash-method taxpayer. Determine if he must include the dividends in gross income under the following independent circumstances.
a. Ellis bought 100 shares of XYZ stock on August 1 for $21 per share. Ellis received $100 on September 10. Ellis still owns the shares at year-end.
b. Ellis bought 100 shares of XYZ stock on August 1 for $21 per share. Ellis sold his XYZ shares on September 5 for $23 per share. Ellis received the $100 on September 10 (note that even though Ellis didn't own the stock on September 10, he still received the because he was the shareholder on the record date).
c. Ellis bought 100 shares of XYZ stock for $22 per share on August 20. Ellis received the $100 on September 10. Ellis still owns the shares at year-end.
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...