! Required information [The following information applies to the questions displayed below.] Badger Corporation declared a stock distribution to all shareholders of record on March 25 of this year. Shareholders will receive one share of Badger stock for each 10 shares of stock they already own. Madison owns 1,000 shares of Badger stock with a tax basis of $100 per share. The fair market value of the Badger stock was $110 per share on March 25 of this year. Note: Leave no answer blank. Enter zero if applicable. c. How would you answer parts (a) and (b) if Badger offered shareholders a choice between receiving one additional share of Badger stock for each 10 Badger shares held or receiving $120 cash in lieu of an additional share of stock? If she takes the: Stock Cash Taxable dividend income $ 11,000 $ 12,000 Income tax basis per share of new shares $ 12,000 $ 10,000
! Required information [The following information applies to the questions displayed below.] Badger Corporation declared a stock distribution to all shareholders of record on March 25 of this year. Shareholders will receive one share of Badger stock for each 10 shares of stock they already own. Madison owns 1,000 shares of Badger stock with a tax basis of $100 per share. The fair market value of the Badger stock was $110 per share on March 25 of this year. Note: Leave no answer blank. Enter zero if applicable. c. How would you answer parts (a) and (b) if Badger offered shareholders a choice between receiving one additional share of Badger stock for each 10 Badger shares held or receiving $120 cash in lieu of an additional share of stock? If she takes the: Stock Cash Taxable dividend income $ 11,000 $ 12,000 Income tax basis per share of new shares $ 12,000 $ 10,000
Chapter22: S Corporations
Section: Chapter Questions
Problem 36P
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Required information
[The following information applies to the questions displayed below.]
Badger Corporation declared a stock distribution to all shareholders of record on March 25 of this year. Shareholders will
receive one share of Badger stock for each 10 shares of stock they already own. Madison owns 1,000 shares of Badger
stock with a tax basis of $100 per share. The fair market value of the Badger stock was $110 per share on March 25 of this
year.
Note: Leave no answer blank. Enter zero if applicable.
c. How would you answer parts (a) and (b) if Badger offered shareholders a choice between receiving one additional share of Badger
stock for each 10 Badger shares held or receiving $120 cash in lieu of an additional share of stock?
If she takes the:
Stock
Cash
Taxable dividend income
$
11,000 $
12,000
Income tax basis per share of new shares
$
12,000 $
10,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F203702db-8ee2-41ef-8f23-4af077c093ec%2F0226ee17-8cbc-4dc5-9b7e-f0c2bf1ccd51%2F4pfkcy_processed.png&w=3840&q=75)
Transcribed Image Text:!
Required information
[The following information applies to the questions displayed below.]
Badger Corporation declared a stock distribution to all shareholders of record on March 25 of this year. Shareholders will
receive one share of Badger stock for each 10 shares of stock they already own. Madison owns 1,000 shares of Badger
stock with a tax basis of $100 per share. The fair market value of the Badger stock was $110 per share on March 25 of this
year.
Note: Leave no answer blank. Enter zero if applicable.
c. How would you answer parts (a) and (b) if Badger offered shareholders a choice between receiving one additional share of Badger
stock for each 10 Badger shares held or receiving $120 cash in lieu of an additional share of stock?
If she takes the:
Stock
Cash
Taxable dividend income
$
11,000 $
12,000
Income tax basis per share of new shares
$
12,000 $
10,000
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