Average basis for stock acquired pursuant to a dividend reinvestment plan
(1) In general
(1)In general#
In the case of any stock acquired after December 31, 2011 , in connection with a dividend reinvestment plan, the basis of such stock while held as part of such plan shall be determined using one of the methods which may be used for determining the basis of stock in a regulated investment company.
(2)Treatment after transfer#
In the case of the transfer to another account of stock to which paragraph (1) applies, such stock shall have a cost basis in such other account equal to its basis in the dividend reinvestment plan immediately before such transfer (properly adjusted for any fees or other charges taken into account in connection with such transfer).
(3)Separate accounts; election for treatment as single account#
(A) In general Rules similar to the rules of subsection (c)(2) shall apply for purposes of this subsection.
(B) Average basis method Notwithstanding paragraph (1), in the case of an election under rules similar to the rules of subsection (c)(2)(B) with respect to stock held in connection with a dividend reinvestment plan, the average basis method is permissible with respect to all such stock without regard to the date of the acquisition of such stock.
(3)(A)In general#
Rules similar to the rules of subsection (c)(2) shall apply for purposes of this subsection.
(3)(B)Average basis method#
Notwithstanding paragraph (1), in the case of an election under rules similar to the rules of subsection (c)(2)(B) with respect to stock held in connection with a dividend reinvestment plan, the average basis method is permissible with respect to all such stock without regard to the date of the acquisition of such stock.
(4)Dividend reinvestment plan#
For purposes of this subsection—
(A) In general The term “dividend reinvestment plan” means any arrangement under which dividends on any stock are reinvested in stock identical to the stock with respect to which the dividends are paid.
(B) Initial stock acquisition treated as acquired in connection with plan Stock shall be treated as acquired in connection with a dividend reinvestment plan if such stock is acquired pursuant to such plan or if the dividends paid on such stock are subject to such plan.
(4)(A)In general#
The term “dividend reinvestment plan” means any arrangement under which dividends on any stock are reinvested in stock identical to the stock with respect to which the dividends are paid.
(4)(B)Initial stock acquisition treated as acquired in connection with plan#
Stock shall be treated as acquired in connection with a dividend reinvestment plan if such stock is acquired pursuant to such plan or if the dividends paid on such stock are subject to such plan.