Dividend Riddle

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Topic Author
YikesHighFees
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Dividend Riddle

Post by YikesHighFees »

If I have a 1099-DIV showing X amount of ordinary dividends for a given tax year, how can I figure out what the asset was worth that generated said X amount of dividends? Thanks in advance for any help...
Thesaints
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Re: Dividend Riddle

Post by Thesaints »

YikesHighFees wrote: Fri Sep 14, 2018 7:02 pm If I have a 1099-DIV showing X amount of ordinary dividends for a given tax year, how can I figure out what the asset was worth that generated said X amount of dividends? Thanks in advance for any help...
How much it was worth when ?
Topic Author
YikesHighFees
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Re: Dividend Riddle

Post by YikesHighFees »

During the year of the 1099 tax year, based on the avg shr price. Looking for a ballpark here.
Thesaints
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Re: Dividend Riddle

Post by Thesaints »

YikesHighFees wrote: Fri Sep 14, 2018 7:25 pm During the year of the 1099 tax year, based on the avg shr price. Looking for a ballpark here.
I think you can find average share price data on yahoo. Depending on the particular stock it may, or may not be meaningful.
Otherwise, you could just pick the price on a fixed day of the year. That's even easier to find around. It would work for a ballpark figure if the stock has not been too volatile.
Alternativel, calculate the average between first and last day of the year. Another simple way.
It is also not difficult to find prices, or the yield, calculated on the record date.
Hope one of these works for you.
Topic Author
YikesHighFees
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Re: Dividend Riddle

Post by YikesHighFees »

Yes, I can find stock price but the only info I have is the ordinary dividend amount on the 1099. Trying to determine how many shares it would take to generate X amount of dividends.
Thesaints
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Re: Dividend Riddle

Post by Thesaints »

YikesHighFees wrote: Fri Sep 14, 2018 7:43 pm Yes, I can find stock price but the only info I have is the ordinary dividend amount on the 1099. Trying to determine how many shares it would take to generate X amount of dividends.
You can only calculate it if you have the yield, or the per share distribution amount.
Topic Author
YikesHighFees
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Re: Dividend Riddle

Post by YikesHighFees »

I found the dividend per share on Morningstar for the year in question. It was .04. If the qualified dividend amount on the 1099 was $10,000, would the formula be X times .04 equals $10,000?
skierrex
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Re: Dividend Riddle

Post by skierrex »

Let's say the stock is UTX.
If you google 'UTX dividend', it shows $0.70 for each dividend this year, so far. They pay dividends quarterly.
At the end of this year, they will report I got $660.80. I can divide that by 4 (for quarterly) to figure out
that each dividend was $165.20.
I divide the amount of the total dividend by the dividend per share (165.2 / 0.70) = 236 shares.
I can google UTX and find the price of $137.80 per share.
The value of my UTX stock is $137.80 * 236 = $32520.80.
skierrex
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Re: Dividend Riddle

Post by skierrex »

If the dividends on your stock were also paid quarterly, it would be 10,000/4 = 2,500. 2,500 / .04 = 62,500 shares.
I don't know if other companies pay dividends other than quarterly.
Topic Author
YikesHighFees
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Re: Dividend Riddle

Post by YikesHighFees »

OK, getting closer to understanding. Morningstar shows div per share for the year was .04. They pay quarterly. Would that mean that each quarterly dividend was .01 rather than .04? In my example and your math, assume ng .01 per quarter:

$10,000 1099-div / 4 = 2,500 / .01 = 250,000 shares. And if share price avg for year was $30, that would mean stock was worth $7,500,000. This can't be right!
skierrex
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Re: Dividend Riddle

Post by skierrex »

what's the ticker symbol for the stock?
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MP123
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Re: Dividend Riddle

Post by MP123 »

Since the annual dividend was 4 cents per share and the 1099-div was also an annual amount you probably don't need to break it down by quarter assuming you held it the whole year. But if the $10,000 dividend came from only one quarter because you bought it in October for example then the amounts above would be even higher.

I agree that posting the symbol would get this cleared up quickly.
Thesaints
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Re: Dividend Riddle

Post by Thesaints »

If you know the annual dividend per share paid, just divide the amont on your 1099-DIV by that number.
If you know only the dividend per share paid in a single quarter, you can’t calculate the number of share owned only on the basis of the annual dividend received.
Grt2bOutdoors
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Re: Dividend Riddle

Post by Grt2bOutdoors »

YikesHighFees wrote: Fri Sep 14, 2018 8:59 pm OK, getting closer to understanding. Morningstar shows div per share for the year was .04. They pay quarterly. Would that mean that each quarterly dividend was .01 rather than .04? In my example and your math, assume ng .01 per quarter:

$10,000 1099-div / 4 = 2,500 / .01 = 250,000 shares. And if share price avg for year was $30, that would mean stock was worth $7,500,000. This can't be right!
Maybe, maybe not. Not all companies make quarterly payments, some make semi-annual payment, some only make an annual payment and some only make what is known as a “special” payment - a one time payment not based on any specific formula but rather on board of directors discretion. What is the ticker symbol of equity in question?
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
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CyclingDuo
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Re: Dividend Riddle

Post by CyclingDuo »

Grt2bOutdoors wrote: Sat Sep 15, 2018 7:03 amMaybe, maybe not. Not all companies make quarterly payments, some make semi-annual payment, some only make an annual payment and some only make what is known as a “special” payment - a one time payment not based on any specific formula but rather on board of directors discretion. What is the ticker symbol of equity in question?
In addition to companies that pay quarterly, semi-annual, annual, and special dividends - some companies pay monthly dividends.
"Save like a pessimist, invest like an optimist." - Morgan Housel | "Pick a bushel, save a peck!" - Grandpa
NotWhoYouThink
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Re: Dividend Riddle

Post by NotWhoYouThink »

Are you trying to reverse engineer someone's net worth based on tax documents?
petulant
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Re: Dividend Riddle

Post by petulant »

Basically, you need to know the stock ticker to look up the information. If all you have is the dividend number, you can't get the asset's worth. The best you could do is a ballpark--setting a range, like dividend stocks generally paying 1% to 3%, and then dividing the dividend number by .01 and .03 to understand the range. E.g., if the 1099-DIV shows $1329 in annual dividends, it is likely that the asset was worth 1329/.01 to 1329/.03, or $44,300 to $132,900. Even that's pretty inaccurate since there are stocks and funds with much higher, and some with lower, payouts.
Topic Author
YikesHighFees
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Re: Dividend Riddle

Post by YikesHighFees »

I have confirmed company paid 4 quarters of dividends, each at .01. Using $10,000 in dividends as an example, there are 4 scenarios to calculate number of shares: whether the annual dividend on the 1099 represents the sum of 1, 2, 3 or 4 quarters, being respectively 1,000,000, 500,000, 333,000, or 250,000. Does this make sense?
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