a. 5 A Corp. wants to pay something to its shareholders this year but is cash poor. The board decides on a three-for-one stock split: common on common (i.e., two shares for each share you own). The shareholders of record at the time of the dividend realize a taxable dividend equal in amount to the value of their pre-split shares. b. has the value of their holdings tripled, taxation on which is postponed until the shares are sold. triple their shares, allocating the pre-split basis in the stock equally among the shares. d. has nontaxable return of all their capital. C. a. 6. X corporation gave the following items during the taxable year to different employees. All were deducted by X as business expenses. Which item(s) would be included in the employees' gross income? A 20-pound turkey (FMV $25) b. Christmas bonus of $100, cash A $500 watch for 20 years service d. A $300 silver cup for 15 years of safe machine operation b and c c. e. a. 7. In the calculation of gross income, which of the following is an example of nontaxable employee benefits (i.e., which one is completely excluded from gross income)? Service discounts for all employees equal to 15% of the normal charge. b. Group-term life insurance for $65,000 of coverage Parking provided in the company garage with a value of $300 per month. d. The personal use portion of a company provided automobile C. 8. M, Inc., operates a funeral home out of a nineteenth-century mansion. M, Inc., does not require R to be on call 24 hours per day but provides the second floor of the mansion, rent free, as an apartment for R. Rent expense for comparable accommodations would amount to $25,000 per year. R has taxable income on this perquisite of $25,000. b. $12,500. $6,000. d. $0. a. c