Adam purchased 1,000 shares of Airco Inc.common stock for $22,000 on February 3,2014.On April 1,2017,Adam received 100 new shares in a nontaxable stock dividend.As of April 1,the stock was trading at $25 per share.Adam sells the 100 new shares on June 15,2017 for $2,400.Due to the stock sale,Adam will recognize a

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D)The basis of the 100 new shares will be $2,000 due to an allocation of the $22,000 purchase between old and new shares ($22,000 × 100/1,100).Because the new shares were received through a nontaxable stock dividend,the holding period of the new shares includes the holding period of the original 100 shares.

Adam Purchased 1,000 Shares of Airco Inc