Brad Owns 100 Shares of AAA Corporation with a Basis

question 42

Multiple Choice

Brad owns 100 shares of AAA Corporation with a basis of $6,000 and a FMV of $24,000.Brad receives 15 stock rights as a nontaxable distribution with a total FMV of $6,000.Brad allows the stock rights to expire.Brad's loss recognized and the basis of the original 100 shares after expiration of the stock rights is

• A)$0 and $4,800.
• B)$0 and $6,000.
• C)($1,200)and $4,800.
• D)($1,200)and $6,000.

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Definitions:

Owner

An individual or entity that legally possesses property, rights, or titles.

Authority

The legal power or right given to an individual or entity to act on behalf of another or make decisions within certain guidelines or scopes.

Specified Time

A clearly defined or established period within which something is supposed to happen or be completed.

Confidential

Information, documents, or communications that are intended to be kept secret or private, often due to their sensitive nature.