Nontaxable Stock Dividends Result in No Change to the Total

question 73

True/False

Nontaxable stock dividends result in no change to the total basis of the old and new stock, but the basis per share decreases.

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Definitions:

Ego

According to Freud, the psychological force that employs reason and operates in accordance with the reality principle.

Fixation

In psychoanalytic theory, an obsessive focus or attachment to a stage of development, object, or person.

Defense Mechanism

Psychological strategies brought into play by individuals to protect themselves from unacceptable thoughts or feelings.

Rationalization

A defense mechanism in which controversial behaviors or feelings are justified and explained in a seemingly rational or logical manner to avoid the true explanation.