Which of the Following Statements Is Correct

question 138

Multiple Choice

Which of the following statements is correct?

• A)Under no circumstances does part of the stock basis have to be allocated to nontaxable stock rights.
• B)If the fair market value of stock rights is equal to at least 15% of the fair market value of the stock, part of the stock basis must be allocated to nontaxable stock rights.
• C)An election may be made to allocate part of the stock basis to nontaxable stock rights only if the fair market value of the nontaxable stock rights is at least 15% of the fair market value of the stock.
• D)Only b.and c.are correct.
• E)Only a.and c.are correct.