contestada

at the beginning of the year, calvin paid $5,000 for 60 shares of eddington stock. in june, he received a $300 cash distribution with respect to the stock. his form 1099-div reported that $170 was an ordinary dividend and $130 was a nontaxable return of capital. compute calvin's tax basis in his 60 shares at year-end. multiple choice $5,000 $4,870 $4,830

Respuesta :

tutorconsortium624

The tax basis of Calvin for 60 shares at the end of the year will be $4,870

How do you calculate tax-basis?

To calculate tax basis of Calvin for 60 shares, purchase price os stock and and non-taxable dividend obtained from it.

So, tax basis = Purchase price of stock – Non-taxable dividend

= $ 5,000 - $ 130

= $ 4, 870

Since, ordinary dividend is regarded as ordinary income, they are included in tax basis calculation and are subject to taxation.

What is tax basis?

Tax basis is the cost basis of an asset at the time it is sold.

The initial cost of purchasing an asset is the cost basis.

The asset's value may either increase or decrease over its lifetime. This adjusted value is referred to as the adjusted cost basis.

The tax basis for an asset is its adjusted cost basis during the time of sale. The distinction between an asset's tax basis and its sale price helps determine whether a company makes a profit or a loss as well as whether taxes are owed or offset in the case of a loss.

To know more about Cost basis, check out:

brainly.com/question/25899244

#SPJ1

Otras preguntas