30 On August 2 2012 Henry Hughes paid 30000 for 500 shares of Young Corp common

30 on august 2 2012 henry hughes paid 30000 for 500

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30. On August 2, 2012, Henry Hughes paid $30,000 for 500 shares of Young Corp. common stock. On July 28, 2013, he received a nontaxable 20 percent common stock dividend. On December 23, 2013, he sold the 100 shares received in July for $4,400. What is the basis of the 100 shares sold? What is the gain or loss on the sale? Is it short-term or long-term?31. Naomi owns 1,000 shares of Nordstrom Corp. common stock which she purchased for $40,000 and later receives a nontaxable preferred stock dividend of 200 shares of Nordstrom preferred stock when the FMV of the preferred was $75 per share and the FMV of the common was $60 per share. What is the basis of the common and preferred shares after the dividend?32. Jamie owns 1,000 shares of Jasper Corp. common stock with a basis of $20,000. She receives a 10 percent taxable stock dividend when the FMV of each share of stock is $12. How much income does she have? What is the basis in the new shares? When does the holding period of the new shares begin? What is the basis in the old stock?33. Whitney Wells owns 600 shares of Fargo Company stock. She purchased these shares in 2011 for $30 each. In 2013, she received 600 nontaxable stock rights to subscribe to 600 additional shares at $35/share. The fair market value of each right was $4 and the fair market value of each share of stock is $40. Assume that Whitney exercises 300 of the rights and sells the rest for $4,500.a. What is Whitney’s basis in the old stock? What is the basis in the new stock?b. What is Whitney’s basis in the old stock if the fair market value of each right was $8 instead of $4? What is the basis in the new stock?c. What is the amount of gain under the assumption in part (b) if Whitney sells the 300 rights for $4,500?34. Kevin Klein owns 900 shares of Palmer Corp. stock which he purchased three years ago for $65 each. He receives one nontaxable right for each share of stock owned. The rights entitle Kevin to receive one share of stock for every three rights plus the payment of $50 per share. On the date of distribution, the market value of the stock was $75 and the market value of the rights was $12. If Kevin exercises 600 of the rights and sells the remaining rights for $3,000, what is
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his basis in the old stock, the rights, the newly purchased stock, and what is his gain or loss on the sale?35. Brian owns 200 shares of Bell Corp. stock purchased in January 2011 for $2,400. On January 30, 2013, he receives 200 taxable stock rights valued at $5 with the right to purchase additional shares at $25.a. How much income does Brian have? What is the basis in the rights? When does the holding period of the rights begin?b. On February 20, 2014, Brian exercises 100 rights and sells the remaining 100 rights for $7 each. What is the basis of each new share? When does the holding period begin? How much and what kind of gain does he have on the sale of the rights?
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