Yes, tax dividends are taxed!

 Great client asked me if stock received instead of cash as a dividend was taxable when stock dividend was received.

Yes Virginia (Santa reference), tax dividends are taxed when received.  The confusion was whether the stock would only be taxed when sold.  This is what happens when you buy stock, however, this stock dividend is a payment, just not in cash.  You should receive a 1099-Div from the company to who issued the stock dividend for your tax return, probably in January.