Question $2(1$ point$)$

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On October $31,2016,$ Bob, a cash basis taxpayer, gave his son Dave common stock that paid a dividend every year. On November $15,2016,$ the corporation declared the dividend payable on December $15,2016,$ to shareholders of record as of November $22,2016.$ The corporation has paid the $$1,000$ dividend once each year for the past ten years, during whilch Bob owned the stock. Dave collected the dividend on December $15,2016.$ Assuming Bob and Dave are in the Tax Court's jurisdiction, who recognizes the dividend for tax purposes?

Bob must report $$250$ of dividend income, and Dave must report $$750$ of dividend in ome

Dave must include all of the dividend in his gross income.

Bob must include all of the dividend in his gross income.

Bob must report $$750$ of dividend income, and Dave must report $$250$ of dividend income.