Helen Receives Stock Worth $1,000 from Her Grandfather as a Graduation

Helen receives stock worth $1,000 from her grandfather as a graduation gift in May 2014 her grandfather paid $100 for the stock many years ago) . In December 2014, she receives a $100 cash dividend on the stock. Helen is not taxed on the value of the stock received in 2014, but she must include the $100 cash dividend in her 2014 gross income. Which of the following form the basis for this treatment? I. Capital Recovery Concept. II. Legislative Grace Concept. III. All-inclusive Income Concept. IV. Constructive Receipt Doctrine.

A) Statements II and III are correct.
B) Statements I and IV are correct.
C) Statements II, III, and IV are correct.
D) Statements II and IV are correct.
E) Only statement I is correct.