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The scenario is: You own a stock for six months, and then the company issues a stock dividend — the business splits into two entities.

Can you sell both stocks after 6 months and a day after the stock dividend, or do you have to wait another year to get long term capital gain treatment?

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  • Welcome. Please note that tax-related questions require a country to be specified. We use tags for that purpose. I've assumed you are in the U.S. based on your profile and mention of capital gains holding periods. Mar 18, 2014 at 2:43

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Stock acquired through a (non-taxable) stock dividend has the same holding period as the stock on which the dividend was paid.

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