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

question 2

Essay

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 in the new and existing common stock she owns in Townsend, assuming the distribution is tax-free?

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Definitions:

Discrimination Complaints

Refers to formal grievances raised by employees or job applicants who believe they have been treated unfairly or prejudicially in the workplace due to their race, gender, age, disability, religious beliefs, or other protected characteristics.

Subjective

Pertaining to or influenced by personal feelings, tastes, or opinions rather than external facts or evidence.

Interview Process

A series of steps or stages involved in selecting a candidate for a position through meetings and assessments.

Paper-and-Pencil Honesty Test

A psychological test designed to assess an individual's honesty and integrity, typically used by employers during the hiring process.