Brad Owns 100 Shares of AAA Corporation with a Basis

question 1572

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

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Definitions:

Optimal Solutions

The best possible outcomes or answers obtained from solving a problem, especially in mathematics, economics, and engineering.

Slack

In business and project management, slack refers to the amount of time that a task in a project schedule can be delayed without causing a delay to subsequent tasks or the overall project.

Constraint

A limitation or restriction that defines the boundaries within which a problem or process must be solved or operate.

Shadow Price

The monetary value assigned to currently unlriced goods or services, reflecting the cost of foregoing their benefits.