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Jack declared a stock dividend to all common stock shareholders of record on December 31, 2012. Shareholders will receive 1 share of Jack common stock for each 5 shares of common stock they already own. Perry own 500 shares of Jack common stock with a tax basis of $120 per share. The fair market value of the Jack common stock was $80 per share on December 31,2012.

Q: What is Perry's basis (per share) in his new and existing Jack common stock, assume the distribution is non-taxable?

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M950270

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