Inger Associates, which manufactures plastic containers, recently sold 12,000 containers to R&A Inc. The selling price per container was $18. R&A paid for the containers by transferring 864 shares of its common stock to Inger. On date of payment, R&A stock was selling on Nasdaq at $250 per share. Compute Inger's tax basis in the R&A stock.
A) -0-.
B) $216,000.
C) Inger's tax basis equals its manufacturing cost of the 12,000 containers.
D) None of these choices are correct.

Question

Quizplus · Accepted Answer

Inger's tax basis in the R&A stock is calculated by multiplying the number of containers sold (12,000) by the selling price per container ($18), which equals $216,000.

Inger Associates, Which Manufactures Plastic Containers, Recently Sold 12,000 Containers