In a nontaxable distribution of stock rights, when the value of the rights is less than 15% of the value of the stock with respect to which the rights were distributed, the basis of the rights is zero unless the shareholder elects to allocate stock basis to the rights.

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This is true according to the tax code. If the value of the stock rights is less than 15% of the value of the stock, the basis of the rights is zero unless the shareholder makes an election to allocate stock basis to the rights.

In a Nontaxable Distribution of Stock Rights, When the Value