Townsend Corporation Declared a 1-For-1 Stock Split to All Common

question 48

Short Answer

Townsend Corporation declared a 1-for-1 stock split to all common stock shareholders of record on December 31,20X3.Townsend reported current E&P of $400,000 and accumulated E&P of $1,000,000.The total fair market value of the stock distributed was $500,000.Regina Williams owned 1,000 shares of Townsend common stock with a tax basis of $200 per share ($2,000,000 total).The fair market value of the common stock was $300 per share on December 31,20X3.What is Regina's income tax basis per share in the new and existing common stock she owns in Townsend,assuming the distribution is tax-free?

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Definitions:

Recombination

The process by which genetic material is physically exchanged between chromosomes or between different regions of the same chromosome during the formation of gametes.

Viral Strains

Variants of a virus that differ from each other in minor ways, but can significantly affect their transmission and the body's immune response to them.

Life Span

The maximum duration of life that an organism can reach, varying widely among different species, influenced by genetics and environmental factors.