Spillover Dividend

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DEFINITION of 'Spillover Dividend'

A type of dividend in which the payment year and the taxable year occur at different times. Most often, this occurs when the dividend has been declared near the end of the calender year (during the fourth quarter), but the actual distribution date of the dividend payment does not occur until the first quarter of the following year.

BREAKING DOWN 'Spillover Dividend'

For example, XYZ Corporation declared that shareholders on record on December 16, 2010, would be entitled to receive a $2 dividend on each share that they own - with the distribution date on March 1, 2011. For income tax related purposes, the shareholders will need to include the $2-per-share dividend when they file their annual tax return for 2010, not 2011.

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RELATED FAQS
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    Because of the small market capitalization and revenues typical of most penny stocks, there are very few that offer dividends. ... Read Full Answer >>
  3. How do dividend distributions affect additional paid in capital?

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  4. When does the holding period on a stock dividend start?

    The holding period on a stock dividend typically begins the day after it is purchased. Understanding the holding period is ... Read Full Answer >>
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