Each of the numbered items below is accorded only one of the following lettered treatments. Use the existing law as it applies to the current year, match the best answer to the statements below.
-Tina receives 100 shares of Welby stock as a result of a 2 for 1 stock split. The shares have a value of $7,000 the day of the split.

Question

Quizplus · Accepted Answer

Stock splits are generally not taxable events. The recipient of the additional shares due to a stock split does not recognize income at the time of the split. Instead, the basis of the original shares is allocated across the total number of shares after the split.

Each of the Numbered Items Below Is Accorded Only One