Part A: Wayne owns 1,000 shares of Bell Corporation common sock with a $44,000 basis. Wayne receives a nontaxable 10% common stock dividend. Calculate Wayne’s new basis in each share of Bell Corporation stock.

Part B: Wayne owns 1,000 shares of Bell Corporation common stock with a $44,000 basis. Wayne now receives a nontaxable stock dividend of 100 shares of preferred stock. Calculate Wayne’s new basis in each share of Bell stock if the FMV of the common stock is $50 per share and the FMV of the preferred stock is $75 per share.

Answer rating: 100% (QA)

Part A Initial basis 440001000 44 per ... View the full answer