the stock rights to expire. Ryan's recognized loss and the basis of the original 100 shares after expiration of the stock rights is

SWFT Comprehensive Vol 2020
43rd Edition
ISBN:9780357391723
Author:Maloney
Publisher:Maloney
Chapter19: Corporations: Distributions Not In Complete Liquidation
Section: Chapter Questions
Problem 29CE
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Ryan owns 100 shares of Ajax Corporation with a basis of $6,000 and a FMV of
$24,000. Ryan receives 15 stock rights as a nontaxable distribution with a total FMV
of $6,000. Ryan allows the stock rights to expire. Ryan's recognized loss and the
basis of the original 100 shares after expiration of the stock rights is
($1,200) and $4,800.
$0 and $4,800.
O ($1,200) and $6,000.
$0 and $6,000.
Transcribed Image Text:Listen Ryan owns 100 shares of Ajax Corporation with a basis of $6,000 and a FMV of $24,000. Ryan receives 15 stock rights as a nontaxable distribution with a total FMV of $6,000. Ryan allows the stock rights to expire. Ryan's recognized loss and the basis of the original 100 shares after expiration of the stock rights is ($1,200) and $4,800. $0 and $4,800. O ($1,200) and $6,000. $0 and $6,000.
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