Reinvesting dividends can complicate tax-loss harvesting due to wash-sale rules. Waiting 30 days before selling after a dividend and selling at least 30 days before the next dividend can help. Fractional shares may result from reinvesting dividends, which can be sold as a market order, possibly taking an additional day to liquidate.

Dividends are taxed differently based on whether they are qualified or nonqualified. Qualified dividends meet certain holding requirements and are taxed at capital gains rates. Nonqualified dividends are taxed as ordinary income. Bond payments are typically taxed as interest income. Income from Treasury bonds may be exempt from state and local taxes.

Reinvested dividends in taxable accounts are taxable. Each reinvested dividend needs to be added to the holding’s cost basis, potentially resulting in multiple tax lots with different cost-basis levels. Matching each sale with a specific tax lot is necessary when selling the stock. The value of a company should not depend on whether it pays dividends, as money is fungible. However, investors often view dividends as more stable and predictable than capital gains.

Read more at Yahoo Finance: 7 things you may not know about dividends