Identify which of the following statements is false.

A) The distribution of stock rights is generally tax free under Sec. 305.

B) The distribution of stock rights will be taxable if the value of the stock rights is more than 15% of the value of the underlying stock.

C) If the value of stock rights is less than 15% of the value of the underlying stock, the basis of the rights is zero unless the shareholder elects to allocate basis to the rights.

D) The holding period for stock rights includes the holding period for the underlying stock.