At the Beginning of the Year,Ms

question 62

Multiple Choice

At the beginning of the year,Ms.Faro paid $15,000 for 750 shares of Gravois stock.She instructed her broker to reinvest any dividends in additional Gravois shares.Her Form 1099-DIV reported that she earned $820 dividend income which purchased 39 additional shares.Which of the following statements is true?

• A)Ms.Faro recognizes no dividend income and has a $15,000 basis in her 789 shares.
• B)Ms.Faro recognizes no dividend income and has a $15,820 basis in her 789 shares.
• C)Ms.Faro recognizes $820 dividend income and has a $15,820 basis in her 789 shares.
• D)None of the above statements is true.

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Definitions:

Favors

Acts of kindness beyond what is due or usual, often done to gain advantage or as a gesture of goodwill.

Personal Distortion

The alteration of reality based on an individual's perceptions, biases, and personal experiences, often leading to misinterpretation of information.

Impression Management

The process by which individuals attempt to control the impressions others form of them, especially in social or professional contexts.

Mislead

To provide false or misleading information that causes someone to form an incorrect conclusion or understanding.