text: Stock dividends are generally not taxable. The following is from the irs web site:\n\nDistributions of Stock and Stock Rights\nDistributions by a corporation of its own stock are commonly known as stock dividends. Stock rights (also known as “stock options”) are distributions by a corporation of rights to acquire the corporation's stock. Generally, stock dividends and stock rights are not taxable to you, and you do not report them on your return.