El Toro Corporation declared a common stock distribution to all shareholders of record on June...
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El Toro Corporation declared a common stock distribution to all shareholders of record on June 30, 20X3. Shareholders will receive 1 share of El Toro stock for each 2 shares of stock they already own. Raoul owns 320 shares of El Toro stock with a tax basis of $75 per share. The fair market value of the El Toro stock was $115 per share on June 30, 20X3. 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 $115 per share. $0 dividend income and a tax basis in the new stock of $75 per share $0 dividend income and a tax basis in the new stock of $50 per share $18,400 dividend and a tax basis in the new stock of $115 per share
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