Question
Greta owns 10 shares of Orso Corp common stock with a $2,700 basis and a $5,000 fair market value. She receives 10 nontaxable stock rights
- Greta owns 10 shares of Orso Corp common stock with a $2,700 basis and a $5,000 fair market value. She receives 10 nontaxable stock rights with a total fair market value of $400. Assume Greta makes no tax elections.
a) What is Gretas basis in the rights?
b) Can Greta make an election to allocate basis to the rights and if so, what would be allocated?
c) Would the answer to part (a) change and if so how, if the fair market value of the rights were $800?
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Ministers Tax And Financial Guide
Authors: Dan Busby, Michael Martin
2020 Edition
0310588790, 978-0310588795
