Which of the following decreases adjusted basis?
A. Amortization of bond premium
B. A corporate distribution to a shareholder treated as a return of capital in which gain is recognized to the shareholder
C. Dividends received
D. Only A and B
E. A, B, and C
What Is Dividend Income:
Taxpayers must include Dividend Income as part of their aggregate gross income. Dividend Income arises when a security owned by the taxpayer declares a dividend. Dividend Income is generally reported in the year when it is received.
Answer and Explanation:
The answer is D.
- Dividends are not considered a decrease in adjusted basis because they are not a return of capital - They are rather included in income.
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Learn more about this topic:
from Accounting 202: Intermediate Accounting IIChapter 8 / Lesson 2