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:

Product Knowledge

Understanding and information about a product, including its features, uses, and benefits, possessed by those marketing, selling, or using it.

Customer Service

The assistance and support provided by a company to those people who buy or use its products or services.

Number Of Sales Calls

The total count of direct interactions, typically phone calls, made by sales representatives to potential or existing customers.

Output-Related Sales Objectives

Targets set by a business related to the quantity of sales or revenue generated within a specific period.