Dixie - In Memoriam
New member
"Capital gains" encompass several different forms of income gain, including gains from sales of stock or stock dividends. Specific stock dividends are not considered the same as capital gains on your tax returns, but these tax rates are essentially the same, so for all intents and purposes, they are the same thing. Now if you just want to pretend that I don't know the difference between a stock dividend and a capital gain, that's fine, but I haven't said they were identically the same thing, just that they are taxed the same way. A stock dividend, can indeed be a capital gain, and a capital gain can indeed be realized from a stock dividend. This doesn't change the fact that something not received or earned as income, can't be taxed as income. A dividend is something that is paid and receieved, if nothing is paid or received, there has been no dividend and nothing to tax.
My own personal portfolio grew over $200k in value last year. I claimed $48k on my tax returns. I did not pay tax on the other $152k because it was never received as income. I could have accepted a dividend payment of $200k and paid taxes on it, but I elected to leave it in security investments that are tax-deferred and not subject to income taxation until I decide to receive the money as income. I didn't receive a dividend, I elected to allow that amount to remain invested and out of my hands as income. If it's not income, you can't tax it.