Luana pays $40 per share for 100 shares of manano corporation common stock. at the end of the year, the market price of the stock is $60 per share. during the year, she receives a cash dividend of $4 per share. manano reports that $3 per share is taxable and $1 per share is a nontaxable dividend. what are the tax effects of these events?

there is capital recovery of share by $1

Explanation:

given data

share = 100

pays =  $40 per share

market price = $60 per share

dividend = $4 per share

taxable  =  $3 per share

nontaxable dividend = $1 per share

to find out

tax effects of these events

solution

we know that Reported as gross income and does not effect basis of stock i.e $3

and basis of the stock is reduces by non taxable dividend that is also excluded from the gross income that is

gross income =  $1 × 100 share

gross income  = $100  

so that

finally the adjusted basis in stock is $40 - $1

adjusted basis in stock is $39

so that It is reduced because

there is capital recovery of share by $1

start by isolating the variable on one side by adding 43w^2 to both sides.   the equation will read:

25w^2+5=0

*subtract 5 from both sides*

25w^2=-5

*divide both sides by 25*

w^2=-1/5

*take the square root of both sides*

w=√(-1/5)

the square root of -1 is i.   the square root of 5 remains √5

the answer is i/√5.

hope this

answer; standing committee;