Description of this paper

34) El Toro Corporation declared a common stock di...

Description

Solution


Question

34) El Toro Corporation declared a common stock dividend to all shareholders of record on June 30, 2010. Shareholders will receive 1 share of El Toro stock for each 2 shares of stock they already own. Raoul owns 300 shares of El Toro stock with a tax basis of $60 per share. The fair market value of the El Toro stock was $100 per share on June 30, 2010. What are the tax consequences of the stock dividend to Raoul? A. $0 dividend income and a tax basis in the new stock of $100 per share B. $0 dividend income and a tax basis in the new stock of $20 per share C. $15,000 dividend and a tax basis in the new stock of $100 per share D. $0 dividend income and a tax basis in the new stock of $60 per share

 

Paper#4800 | Written in 18-Jul-2015

Price : $25
SiteLock