Question

All of the following distributions of stock dividends are taxable except: a. The shareholders have the choice to receive cash or other property instead of stock or stock rights. b. The distribution of common stock is made on a prorated basis on common stock outstanding. c. The distribution gives cash or other property to some shareholders and an increase in the percentage interest in the corporation's assets or earnings and profits to other shareholders. d. The distribution gives preferred stock to some common stock shareholders and common stock to other common stock shareholders.

Answer 1

Answer:

d. The distribution gives preferred stock to some common stock shareholders and common stock to other common stock shareholders.

Explanation:

This is likely the answer to the question. There is no way preferred stock would be given to some common stock shareholders while common stock to other stock to others.