If the stock received as a nontaxable stock dividend is not the same type as the stock owned prior to the dividend,the allocation of basis is based on relative fair market values of the stock.

Name: If the stock received as a nontaxable stock dividend is not the same type as the stock owned prior to the dividend,the allocation of basis is based on relative fair market values of the stock.
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Quizplus · Accepted Answer

This statement is true according to the IRS guidelines for basis allocation of nontaxable stock dividends.

If the Stock Received as a Nontaxable Stock Dividend Is