Which of the following decreases adjusted basis? A. Amortization of bond premium B. A corporate...

Question:

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.

Learn more about this topic:

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How to Calculate Corporate Taxable Financial Income

from Accounting 202: Intermediate Accounting II

Chapter 8 / Lesson 2
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