Bob Owns 100 Shares of ACT Corporation Common Stock with a Basis

question 1881

Multiple Choice

Bob owns 100 shares of ACT Corporation common stock with a basis of $3,500 and a FMV of $12,000. Bob receives 10 stock rights as a nontaxable distribution, and no basis is allocated to the stock rights. With each stock right, Bob may acquire one share of stock for $25. Bob exercises all 10 stock rights. The total basis of the newly acquired stock is

• A) $1,200.
• B) $0.
• C) $250.
• D) $350.

---

Definitions:

Society

A collection of people engaged in ongoing social interaction, or a significant social group occupying the same geographic or social area, generally governed by the same political authority and prevailing cultural norms.

Privacy Rights

Legal entitlements that protect individuals from unauthorized access to personal information and intrusion into their personal affairs.

Supreme Court

The highest judicial body in a country, typically having the ultimate appellate jurisdiction.

Constitutional Amendments

Changes or additions made to the U.S. Constitution, providing a way to adjust the government's structure and protect citizens' rights.