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Common Stock Distribution Assignment | Top Universities

El Toro Corporation declared a common stock distribution to all shareholders of record on June 30, 20X3. Shareholders will receive one share of El Toro stock for each two shares of stock they already own. Raoul owns 460 shares of El Toro stock, with a tax basis of $99 per share. The fair market value of the El Toro stock was $139 per share on June 30, 20X3.
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What are the tax consequences of the stock distribution to Raoul? Multiple Choice $0 dividend income and a tax basis in the new stock of $139 per share. $0 dividend income and a tax basis in the new stock of $99 per share. Oo oo $0 dividend income and a tax basis in the new stock of $66 per share. $31,970 dividend and a tax basis in the new stock of $139 per share. Get Accounting Homework Help Today

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