In a taxable distribution of stock, the recipient shareholder takes a basis equal to the FMV of the stock received.

Question

Quizplus · Accepted Answer

When a shareholder receives stock in a taxable distribution, their basis in the stock is equal to the fair market value (FMV) of the stock received. This means that the shareholder will use this FMV as the basis when calculating capital gains or losses upon selling the stock.

In a Taxable Distribution of Stock, the Recipient Shareholder Takes