XYZ declared a $$1$ per share dividend on August $15.$ The date of record for the dividend was September $1($the stock began selling ex$-$dividend on September $2).$ The dividend was paid on September $10.$ Ellis is a cash$-$method taxpayer. Determine if he must include the dividends in gross income under the following independent circumstances.

Required A

Ellis bought $110$ shares of XYZ stock on August $1$ for $$23$ per share. Ellis received a $$110$ dividend on September $10.$ Ellis still

owns the shares at year$-$end.Required A

Ellis bought $110$ shares of XYZ stock on August $1$ for $$23$ per share. Ellis received a $$110$ dividend on September $10.$ Ellis still

owns the shares at year$-$end.

Ellis bought $110$ shares of XYZ stock on August $1$ for $$23$ per share. Ellis sold his XYZ shares on September $5$ for $$26$ per

share. Ellis received the $$110$ dividend on September $10($note that even though Ellis didn't own the stock on September $10,$

he still received the dividend because he was the shareholder on the record date$).$

Ellis bought $110$ shares of XYZ stock for $$25$ per share on August $20.$ Ellis received the $$110$ dividend on September $10.$ Ellis

still owns the shares at year$-$end.

Dividend in income