On January 30, Juan Receives a Nontaxable Distribution of Stock

question 39

Multiple Choice

On January 30, Juan receives a nontaxable distribution of stock rights from Platinum Corporation. Each right entitles the holder to purchase one share of stock for $40. One right is issued for every share of stock owned. Juan owns 100 shares of stock purchased two years ago for $4,000. At the date of distribution, the rights are worth $1,000 (100 rights at $10 per right) and Juan's stock in Platinum is worth $5,000 (or $50 per share) . On December 1, Juan sells all 100 stock rights for $12 per right. How much gain does Juan recognize on the sale?

• A) $1,200
• B) $533
• C) $400
• D) $0
• E) None of the above

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Definitions:

Is Null

A condition or expression used in databases to check for missing or empty values.

Bedrooms Field

In database or software applications related to real estate or lodging, a data field used to specify the number of bedrooms in a property.

Freeze

In computing, the action of making a row or column constant so it remains visible on the screen as you scroll through a document or spreadsheet.

Query Datasheet

A tabular view of data returned from a database query, allowing for manipulation and analysis within database software.