All reinvested distributions, except Return of Capital, are taxable in the year you receive them. Return of Capital is a return of money the club invested and on which the members have already paid tax. A reinvestment is a type of transaction in which the club receives some amount of income from a security and immediately reinvests it in that security. The most common transactions occur in DRIPs, or dividend reinvestment programs. Use the foreign tax page and the charges paid by company page to record any foreign taxes or charges paid by company associated with a reinvestment transaction.

How to Enter the Reinvestment

The ex-dividend date is the earliest date on which a club can sell a stock paying a dividend and still receive that dividend. The ex-dividend date is two trading days before the record date and typically between two and five weeks before the payment (transaction) date.

Changes to the tax laws in JGTRRA of 2003 define certain dividends as "qualifying" for lower tax rates if you own the shares for more than 60 days in the window starting 60 days before the ex-dividend date and ending 121 days later.

Generally, the only time that the ex-dividend date will be important is when the qualifying window extends beyond the end of the calendar year. In most other situations, the dates of buy and sell transactions (or the absence of any sale) will allow determination of qualifying status.

Club Accounting Online calculates the price per share of the newly acquired securities. Sometimes brokers round off values to three decimal places. Therefore, do not worry if this value differs slightly from what is on your broker's statement.

Make sure the Amount Received and the Shares Received match your statement. The Price per share calculated by Club Accounting Online may be slightly different from your statement because statements often report the average price per share for all reinvested distributions for the reinvestment period, or statements round the number of shares received to the nearest .001 or .0001 shares.

Club Accounting Online computes and displays the Total amount of distribution.

Click 'Submit to save the transaction, Cancel to return to accounting main page, or Reset to clear the page.

If you choose Submit, a confirmation screen appears with the transaction information.