Doug Doolittle receives a nontaxable stock dividend of 20 shares of Edwards Corporation common stock with a fair market value at distribution of $800. Doug previously owned 100 shares of Edwards Corporation common stock which he purchased three years ago for $6,000. fte basis per share of the 20 shares of Edwards Corporation stock is:
A) $0
B) $40
C) $50
D) $60

Question

Quizplus · Accepted Answer

$6,000 divided by 120 shares = $50 per share
 ftis was a nontaxable stock dividend of identical shares.

Doug Doolittle Receives a Nontaxable Stock Dividend of 20 Shares