Recently, quite a few REIT's (real estate investment trusts) have paid dividends in stock in the form of "payment in kind," "payable in kind," or "PIK" dividends. This was done to conserve cash during the credit crisis. These PIK dividends differ from the regular "dividends paid in stock" described above because the PIK dividend is taxable in full when paid. Your cost basis in the additional shares is the amount of your taxable dividend that you did not receive in cash. It is similar to a mandatory dividend reinvestment. The stock split calculator should not be used for PIK dividends.
Examples of companies paying recent PIK dividends are:
Simon Property Group (SPG)
Vornado Realty Trust (VNO)
|
Click on the image below
to access our free
Stock Split Calculator
for Stock Dividends
|
