Brad Owns 100 Shares of AAA Corporation with a Basis

question 42

Multiple Choice

Brad owns 100 shares of AAA Corporation with a basis of $6,000 and a FMV of $24,000.Brad receives 15 stock rights as a nontaxable distribution with a total FMV of $6,000.Brad allows the stock rights to expire.Brad's loss recognized and the basis of the original 100 shares after expiration of the stock rights is

• A)$0 and $4,800.
• B)$0 and $6,000.
• C)($1,200)and $4,800.
• D)($1,200)and $6,000.

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Definitions:

Situational Attribution

The process of attributing a person's behavior to external or environmental factors.

Cognitive Dissonance

The psychological discomfort experienced when holding two or more conflicting beliefs, values, or attitudes simultaneously.

Foot-In-The-Door

A persuasion technique where a small request is initially made to get someone to agree to a larger request later.

Situational Attribution

The process of explaining an individual's behavior based on external events or situations, rather than on internal personality traits.