### Question
How does the law define extraordinary dividend?


### Answer
Under *26 U.S.C. § 1059*, **extraordinary dividend** is defined as:

> any dividend with respect to a share of stock if the amount of such dividend equals or exceeds the threshold percentage of the taxpayer's adjusted basis in such share of stock

#### Citation:
  - *26 U.S.C. § 1059*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter O-Gain or Loss on Disposition of Property > PART IV-SPECIAL RULES**

