Dustin purchased 50 shares of Short Corporation for $500. During the current year, Short declared a nontaxable 10% stock dividend. What is the basis per share before and after the stock dividend is distributed?

Name: Dustin purchased 50 shares of Short Corporation for $500. During the current year, Short declared a nontaxable 10% stock dividend. What is the basis per share before and after the stock dividend is distributed?
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Question

Quizplus · Accepted Answer

500 original basis/ (50 original shares + 5 new shares) = $9.09

Dustin Purchased 50 Shares of Short Corporation for $500