B Owns 100 Shares of T Corporation Common Stock, Which

question 3

Multiple Choice

B owns 100 shares of T Corporation common stock, which he acquired on June 1, 2004 for $800.On October 15 of this year he received a stock dividend of 25 shares of preferred worth $4 per share when the common was worth $1 per share.What is B's basis in his preferred stock and when does his holding period begin?

• A)$640; June 1, 2004
• B)$400; June 1, 2004
• C)$100; October 15, this year
• D)$640; October 15, this year
• E)None of the above

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