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Graham purchased 100 shares of Green Inc. common stock two years ago for $10,000. In...

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Accounting

Graham purchased 100 shares of Green Inc. common stock two years ago for $10,000. In the current tax year, Graham received a nontaxable preferred stock dividend of 100 shares. The preferred stock had a FMV of $4,000, and the common stock, on which the preferred stock was distributed, had a FMV of $12,000 on the date of distribution. What is the tax basis of the preferred stock to Graham?

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