Melody's adjusted basis for 10,000 shares of Cardinal, Inc. common stock is $1,000,000. During the year, she receives a 5% stock dividend that is a nontaxable stock dividend.
a. Melody reports no gross income because the dividend is a nontaxable stock
a. What is the amount of Melody's gross income?
b. What is Melody's total basis for the stock?
c. What is Melody's basis per share?

Question

Quizplus · Accepted Answer

The Answer of Melody's adjusted basis for 10,000 shares of Cardinal, Inc. common stock is $1,000,000. During the year, she receives a 5% stock dividend that is a nontaxable stock dividend.
a. Melody reports no gross income because the dividend is a nontaxable stock
a. What is the amount of Melody's gross income?
b. What is Melody's total basis for the stock?
c. What is Melody's basis per share?

Melody's Adjusted Basis for 10,000 Shares of Cardinal, Inc