re: #270 Buck

I explained it. But let me use actual figures.

A person can own shares on a stock. Let’s say they spend $21 a share for 1000 shares or $21,000.

Now until they sell the stock, they don’t have any taxable profit or loss. The shares might go up, and it also might go down.

IN the meanwhile the company pays 63 cents/share/year in dividends. In this case the investor gets $630 a year in dividend income. It isn’t profit. The shares might have lost $3 in share value in that year. So the investor has lost $2,370 in that year. They have not profited from the transaction.

The investor did not lose any money. The money is lost when he sells the stock.

If you take a dividend in the same year but sell the stock at a loss, these are rectified in tax code.