Your account was lending shares of stock on the stock’s dividend record date. Instead of being paid a dividend, you were paid a Payment-in-Lieu of a dividend, or “PIL.” As a US taxpayer, you may experience adverse tax consequences from receiving PIL, instead of the dividend directly from the issuer, while shares were on-loan. This payment is your compensation for potential adverse tax consequences, and is called a “Gross-Up.”
Please Note
- Since Interactive Brokers does not know the particulars of your tax situation, the payment is an estimate and the amount is final.