On October 1,2011,Bob,a Cash Basis Taxpayer,gave Dave Common Stock That

On October 1,2011,Bob,a cash basis taxpayer,gave Dave common stock that paid a dividend of $1,000 on December 15,2011.On November 15,2011,the corporation declared the dividend payable to shareholders of record as of November 22,2011.The corporation has paid the $1,000 dividend once each year for the past ten years,during which Bob owned the stock.When Dave collected the dividend on December 15,2011:

A) Bob must include all of the dividend in his gross income.
B) Dave must include all of the dividend in his gross income.
C) Bob must report $750 of dividend income, and Dave must report $250 of dividend income.
D) Bob must report $250 of dividend income, and Dave must report $750 of dividend income.
E) None of the above is correct.