At the beginning of the year,Calvin paid $5,000 for 60 shares of Eddington stock.In June,he received a $300 cash distribution with respect to the stock.His Form 1099-DIV reported that $170 was an ordinary dividend and $130 was nontaxable.Compute Calvin's tax basis in his 60 shares at year-end.

Question

Quizplus · Accepted Answer

Calvin's tax basis is reduced by the nontaxable distribution of $130, so his basis is $5,000 - $130 = $4,870.

At the Beginning of the Year,Calvin Paid $5,000 for 60