Tappan Declared a 100 Percent Stock Distribution to All Shareholders

question 48

Essay

Tappan declared a 100 percent stock distribution to all shareholders of record on May 2 of this year. Prior to the distribution, Tappan reported current E&P of $60,000 and accumulated E&P of $30,000. Prior to the split, Barb owned 100 shares of Tappan stock, with a market value of $150 per share and a tax basis of $100 per share. After the distribution, Barb owned 200 shares of Tappan, with a market value of $80 per share. What is the per-share tax basis of Barb's additional 100 shares?

---

Definitions:

Spinal Cord

A long, thin, tubular structure made up of nervous tissue, extending from the brainstem down the back, playing a central role in sending messages between the brain and the body.

Detecting

The act of discovering or identifying the presence of something concealed or unknown.

Lying

The act of deliberately making a false statement or deceiving someone.

Visualizes

The process of forming mental images or concepts of what is not physically present to the senses.