Exercise 14-21 (Algorithmic) (LO. 3) Heather owns 900 shares of Diego Corporation common stock for which she paid $18,000. She receives a nontaxable stock dividend of 90 shares of preferred stock on her common stock. The fair market values on the date of distribution of the preferred stock dividend are $50 a share for common stock and $250 a share for preferred stock. What is Heather's basis in the common and preferred shares? Round any division to two decimal places and use rounded values in subsequent computations. If required, round your final answers to the nearest dollar. Heather's basis for the common stock is $ 12,000 X and $ 6,000 X for the preferred stock. Feedback Check My Work In the case of nontaxable stock dividends, the allocation depends on whether the dividend is a common stock dividend on common stock or a preferred stock dividend on common stock.
Exercise 14-21 (Algorithmic) (LO. 3) Heather owns 900 shares of Diego Corporation common stock for which she paid $18,000. She receives a nontaxable stock dividend of 90 shares of preferred stock on her common stock. The fair market values on the date of distribution of the preferred stock dividend are $50 a share for common stock and $250 a share for preferred stock. What is Heather's basis in the common and preferred shares? Round any division to two decimal places and use rounded values in subsequent computations. If required, round your final answers to the nearest dollar. Heather's basis for the common stock is $ 12,000 X and $ 6,000 X for the preferred stock. Feedback Check My Work In the case of nontaxable stock dividends, the allocation depends on whether the dividend is a common stock dividend on common stock or a preferred stock dividend on common stock.
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter13: Corporations: Earning & Profits And Distributions
Section: Chapter Questions
Problem 29P
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Transcribed Image Text:Exercise 14-21 (Algorithmic) (LO. 3)
Heather owns 900 shares of Diego Corporation common stock for which she paid $18,000. She receives a nontaxable stock dividend of 90
shares of preferred stock on her common stock. The fair market values on the date of distribution of the preferred stock dividend are $50 a
share for common stock and $250 a share for preferred stock. What is Heather's basis in the common and preferred shares?
Round any division to two decimal places and use rounded values in subsequent computations. If required, round your final
answers to the nearest dollar.
Heather's basis for the common stock is $
12,000 X and $
6,000 X for the preferred stock.
Feedback
Check My Work
In the case of nontaxable stock dividends, the allocation depends on whether the dividend is a common stock dividend on common stock or a
preferred stock dividend on common stock.
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