[alexio senchez]

I’ve got Property Transactions taxation down, but I’ve been skipping questions that ask about stock transactions where there are stock splits and the resulting basis. Here’s a couple of examples from Ninja MCQ:

Greller owns 100 shares of Arden Corp., a publicly traded company, which Greller purchased on January 1, Year 2, for $10,000. On January 1, Year 9, Arden declared a 2-for-1 stock split when the fair market value (FMV) of the stock was $120 per share. Immediately following the split, the FMV of Arden stock was $62 per share. On February 1, Year 9, Greller had his broker specifically sell the 100 shares of Arden stock received in the split when the FMV of the stock was $65 per share. What is the basis of the 100 shares of Arden sold?

or

Carter purchased 100 shares of stock for $50 per share. Ten years later, Carter died on February 1 and bequeathed the 100 shares of stock to a relative, Boone, when the stock had a market price of $100 per share. One year later, on April 1, the stock split 2-for-1. Boone gave 100 shares of the stock to another of Carter’s relatives, Dixon, on June 1 that same year, when the market value of the stock was $150 per share. What was Dixon’s basis in the 100 shares of stock when acquired on June 1?

In your experience should I dedicate some time to understanding this specific portion of Prop Taxation?

Thanks in advance.

Alex

[Paydirt123]

alexio senchez: Yes, study it and learn it. Every exam is different, but having taken REG but a couple weeks ago I kindly recommend knowing ALL property transaction content, as well as ALL basis content. I'm too lazy to look it up for you right now, sorry man, but if you look at the content specification outline (CSO) for REG, I'm willing to bet those topics are listed as well. Best of luck.

AUD - 84
BEC - 80
FAR - 80
REG - 85

Took the long way, but I got there

[Paydirt123]

I did mention “ALL” right, lol… best of luck

AUD - 84
BEC - 80
FAR - 80
REG - 85

Took the long way, but I got there

[D]

@Alexio Sanchez… I remember seeing that question last night doing some last minute studying! 🙂 But to answer your question, YES (echoing the response above), know property transactions. Be comfortable with all types of them. They suck, but like stated above the CSO shows this section is fairly heavily weighted, so study accordingly.

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AUD: 77  (Jan 2016)
BEC: 80  (May 2016)
REG: (rematch May 2017)
FAR: (rematch Apr 2017)
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AUD - 74, 77! (1/2016)
BEC - 80! (5/2016)
REG - tbd (8/2016)
FAR - tbd

Study materials: NINJA MCQ/Audio/Notes

"I can do ALL things through Christ who strengthens me!"
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[Author]

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