Consider a person with 10,000 shares of SolarCity stock. Assume that Tesla stock is trading at $224.84 when the merger is completed.

a. How many Tesla shares will this person receive?

b. Suppose the person had a $10 per share basis in her SolarCity stock. How much taxable gain or loss will the person recognize at the time of the merger?

c. What basis per share will the person take in the Tesla stock received?

d. Will the tax basis this shareholder takes in the Tesla stock received be larger, smaller, or equal to it market value? By how much?

Answer rating: 100% (QA)

Explanation a The person will receive 10000 Tesla shares The share ownership dur... View the full answer