Question
B Corp owned 100,000 shares. Basis was $ 1 million in these shares. A Corp pays a stock dividend -2 shares for every share. Thus,
B Corp owned 100,000 shares. Basis was $ 1 million in these shares.
A Corp pays a stock dividend -2 shares for every share. Thus, he will now own 300,000 shares rather than 100,000 shares.
What are the tax consequences (how much taxable income) resulting to A Corp and B Corp?
What is B Corps basis per share after receiving this distribution of 200,000 shares?
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Accounting
Authors: Carl S. Warren, James M. Reeve, Philip E. Fess
20th Edition
0324025424, 978-0324025422
