A distribution of taxable stock rights or dividends generally is treated the sam

Question

A distribution of taxable stock rights or dividends generally is treated the same as A. Any other property distribution, but the holding period begins on the day of the issue of the underlying stock. B. Any other property distribution, and the holding period begins on the day after the distribution date. C. The distribution of an obligation of the distributing corporation. D. A cash distribution. A distribution of taxable stock rights or dividends generally is treated the same as A. Any other property distribution, but the holding period begins on the day of the issue of the underlying stock. B. Any other property distribution, and the holding period begins on the day after the distribution date. C. The distribution of an obligation of the distributing corporation. D. A cash distribution.

Explanation / Answer

A distribution of taxable stock rights or dividends generally is treated the same as Any other property distribution, and the holding period begins on the day after the distribution date.

Because it is dividend to the extent it is made out of E&P and the basis of the stock rights to the share id FMV then the holding period of the stock or stock rights begins on the day after the distribution date.

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