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:

Independent Variable

The variable in an experimental setting that is manipulated to observe its effect on a dependent variable.

Random Error

Variability in data that arises from unpredictable fluctuations in the measurement process.

Null Hypothesis

A statement in statistics that proposes there is no significant effect or difference between specified populations, any observed difference being due to sampling or experimental error.

Observed Difference

The apparent discrepancy or variation between two groups or conditions in an experiment or study.