The recipient of a taxable stock distribution will have a tax basis in the stock equal to the fair market value of the stock received.

Question

Quizplus · Accepted Answer

When a stock distribution is taxable, the recipient's tax basis in the stock received is equal to its fair market value at the time of distribution. This is because the value of the stock is considered taxable income to the recipient.

The Recipient of a Taxable Stock Distribution Will Have a Tax