Identify Which of the Following Statements Is False

question 59

Multiple Choice

Identify which of the following statements is false.

• A) The holding period for stock rights includes the holding period for the underlying stock.
• B) The distribution of stock rights is generally tax free under Sec. 305.
• C) 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.
• D) 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.

---

Definitions:

Affixed

Affixed means to be attached or securely connected to something else, typically in a permanent or semi-permanent manner.

Joint Tenants

A form of property co-ownership where each party has an equal share and the right of survivorship.

Tenants in Common

A form of co-ownership where each party owns a separate and undivided interest in the property, and upon death, their share is inheritable by their heirs.

Duplex

A building that is divided into two separate units, each with its own entrance and living space, often used for residential purposes.