Code Sections-MC2-Stock Dividends

Question 1

301

Answer 1

distributions of property- applies if 305 (a) is inapplicable

Question 2

305 (a)

Answer 2

distributions of stock

(a) general rule- stock dividend not included in gross income

Question 3

305 (b)

Answer 3

distributions of stock

(b) exceptions requiring 301 treatment
(1) distributions in lieu of money
(2) disproportionate distributions
(3) distributions of common AND preferred stock
(4) distributions ON preferred stock
(5) distributions of convertible preferred stock

Question 4

305 (d)

Answer 4

distributions of stock
Definitions
(1) stock includes rights to receive stock
(2) shareholder includes holder of stock rights or convertible securities

Question 5

306

Answer 5

dispositions of 306 stock

Question 6

306(a)

Answer 6

dispositions of 306 stock
general rule-
(1) dispositions other than redemptions
(2) redemptions

Question 7

306(b)

Answer 7

dispositions of 306 stock

exceptions to general rule

Question 8

306(c)

Answer 8

definition of 306 stock

Question 9

307(a)

Answer 9

basis of stock (and rights) received ina 305(a) stock dividend
(a) general rule- basis of old stock allocated to old and new stock in proportion to relative FMVs

Question 10

311(a)

Answer 10

no gain or loss recognized by the corporation for a nontaxable stock dividend

Question 11

312(d)

Answer 11

no reduction in E&P for nontaxable stock dividends

Question 12

1223(5)

Answer 12

holding period of the new stock includes the holding period of the old stock