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Judd Harrison owns 200 shares of stock in the Widget Co for which he paid 1600 in 1999. The board of directors of the company

Judd Harrison owns 200 shares of stock in the Widget Co for which he paid 1600 in 1999. The board of directors of the company decided to pay a 10 percent stock dividend in April 2009, for which Judd received 20 shares of stock. In Jan 2010 Judd decides to sell 100 shares in the Widget company. Since April 2009 no stock dividends had been paid by the company. On the date the stock is sold the market price is 12 a share. What is the basis that Judd must use in computing any gains and losses on the sale and what is the amount of gain or loss he must recognize in 2010? a. basis 727 / gain 574 b. basis 800/gain 460 c. basis 727/gain 473 d. basis 800/gain 400

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