On January 20th, the Board of Directors of A Corp. declares a $5 per share cash dividend. The dividend is payable on January 30th to shareholders of record on January 25th. As of January 1st, Taxpayer X owns 100 shares of A Corp.s stock. On January 15th, Taxpayer X makes a gift of these 100 shares to Taxpayer Y. Which of the following correctly states case precedent in the United States Tax Court regarding the taxation of the cash dividends?

A.The United States Tax Court has held that Taxpayer Y reports the $500 cash dividend as taxable income because the fruit has sufficiently ripened as of the date of declaration.

B. None of the other choices are correct.

C. The United States Tax Court has held that Taxpayer X reports the dividend income as taxable income because the fruit has sufficiently ripened as of the date of dividend declaration.

D. The United States Tax Court has held that Taxpayer Y reports the $500 cash dividend as taxable income because the fruit has sufficiently ripened as of the date of record.

E. The United States Tax Court has held that Taxpayer Y reports the $500 cash dividend as taxable income if Taxpayer Y is a qualified charity, or a family member of Taxpayer X, and the gift of the stock occurs after the declaration date but before the record date because gifts to charities and gifts to family members are treated differently by the Fifth Circuit Court of Appeals.