I am aware that reinvesting dividends can trigger wash sale rules, but does that apply only when dividends are manually (re-)invested (i.e. a sales commission is charged because a cash dividend is used to buy additional shares), or does that apply also to when the dividend is paid as additional shares (i.e. NOT purchased) instead of cash. I don't see the latter case as a (re-)purchase especially where no commission is charged (where one would be subject to a commission if the dividend were paid as cash). Does this require that the company itself issue the shares (to avoid the wash); i.e. NOT a broker (or broker's "drip")? IRC 1091 requires a (re-)purchase or exchange, so I do not see the payment of a dividend as shares directly by the company as either (while a dividend payment as cash converted to shares, including fractional shares, by a broker would be a purchase).
It is clear that not all reacquisitions of stock would invoke the wash sale rules, including but not limited to gifts, inheritance, or non-recognized (or less-than-fully recognized) exchanges.
For those who want to know the context: I am thinking of selling a holding to recognize a loss, then repurchasing it after 31 days. It pays a quarterly dividend which I receive as shares, so there is a window every quarter year where I can do this. The only question is how wide that window is - because if I have to watch out for dividend payments, the window every quarter is alot smaller. It is NOT a mutual fund (mutual fund reinvestments are always repurchases), but shares of a publically-traded corporation.
A stock-broker friend of mine indicates that it may be possible to ignore dividend dates but only when the dividend issued is declared by the issuing company in terms of shares* instead of currency. Dividends declared in currency but received as shares are always considered purchases.
- - Not a stock split.