From: utzoo!decvax!harpo!npoiv!npois!houxm!ihnp4!ixn5c!inuxc!pur-ee!uiucdcs!gear Newsgroups: net.taxes Title: Re: Reinvesting Dividends - (nf) Article-I.D.: uiucdcs.1285 Posted: Fri Dec 31 12:27:17 1982 Received: Sun Jan 2 01:27:01 1983 #R:uw-beave:-26600:uiucdcs:13200001:000:346 uiucdcs!gear Dec 31 09:42:00 1982 They have to be reinvested via a dividend reinvestment plan as I understand it. They are then deferred until you sell the stock at which time the basis of the stock so purchased is zero--that is, you will pay taxes on the total proceeds from the sale of the stock you so obtained, but at capital gain rates which are 40% of regular income rates!