Some companies offering  Dividend Reinvestment Plans (DRIP's)  pay expenses such as commissions and fees on the behalf of plan participants.   These commissions and fees, which are paid by the company, are considered by the IRS to be additional dividend income for your club in the year in which they are paid.    Unfortunately, companies seem to be very inconsistent in the manner in which they report these amounts on the Form 1099-DIV's which are sent both to you and to the IRS.

In some cases, companies consolidate these dividends and  company paid fees, reporting the combined amount in both box 1a and 1b on the Form 1099-DIV.  In other cases, companies consolidate both the dividends and company paid fees in box 1a,  but exclude company paid fees in box 1b.   And, in some cases, while combining both in line 1a, they also report these company paid fees in a separate box on the 1099-DIV titled "Commissions", "Broker Commission", etc.

As a practical matter, due to the various methods that companies report these items on both the DRIP statement and the 1099-Div at year end, it would probably be best to simply reconcile your club records with each 1099-DIV received at the end of the year.  If the company has included company paid commissions and fees in line 1a on the 1099-DIV, then  enter those same amounts into bivio.  If the company does not include company paid commissions and fees into the amount of dividends reported on the 1099-DIV, then do not enter those amounts into bivio.  By doing this, your club records will always match those which have been supplied to the IRS.

 

Jerry Dressel
St.Louis, Missouri
Trez_Talk@bivio.com