Big Corp declares a stock dividend of .25 shares of common stock OR $1/share to all shareholders for each share of Big Corp they own on 12/31/Y1. Jim owns 200 shares of Big Corp Stock on that date, with a basis of $5 PER SHARE and chooses the stock option resulting in him getting 50 new shares of Big Corp stock.

a) Discuss the tax implication to Jim.

b) Discuss the tax implication to Big Corp.

c) What is Jim's tax basis PER SHARE in his 250 shares of Big Corp?