On January 6, 2012, Sally Strom purchased 300 shares of common stock in Corporation XYZ for $120 per share. Four months later she purchased 100 additional shares at $180 per share. On December 13, 2012, Sally received a 20 percent nontaxable stock dividend. What is Sally's basis in each share of stock after the stock dividend?
A) 480 shares at $112.50 per share
B) 360 shares at $120 per share and 120 shares at $180 per share
C) 360 shares at $120 per share and 120 shares at $150 per share
D) 360 shares at $100 per share and 120 shares at $150 per share

Question

Quizplus · Accepted Answer

Sally has 360 shares (300 + 60) from the ﬁrst batch purchased for a total of $36,000, which gives a basis of
$100 per share
 She has 120 shares (100 + 20) from the second batch purchased for a total of $18,000, which gives a basis of $150 per share

On January 6, 2012, Sally Strom Purchased 300 Shares of Common