At the beginning of the year, Mr. Olsen paid $15 per share for 620 shares of Carmel

Question:

At the beginning of the year, Mr. Olsen paid $15 per share for 620 shares of Carmel common stock. He received cash distributions totaling $840. His Form 1099 reported that $700 was a dividend and $140 was a nontaxable distribution. Compute his basis in his 620 shares at year-end.

Assume the taxable year is 2018.

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...

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