Etta received nontaxable stock rights on October 3,2014.She allocated $16,000 of the $50,000 basis for the associated stock to the stock rights.The stock rights are exercised on November 8,2014.The exercise price for the stock is $52,000.What is Etta's basis for the acquired stock?
A)$0
B)$16,000
C)$52,000
D)$68,000
E)None of these

Question

Quizplus · Accepted Answer

Cost $52,000
Basis for stock rights 16,000
Basis for new stock $68,000

Etta Received Nontaxable Stock Rights on October 3,2014