McGraw-Hill's Taxation of Individuals and Business Entities 3rd Edition by Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver

Exercise 36

Badger Corporation declared a stock dividend to all shareholders of record on March 25, 2011.Shareholders will receive 1 share of Badger stock for each 10 shares of stock they already own.Madison Cheeseman owns 1,000 shares of Badger stock with a tax basis of $100 per share.The fair market value of the Badger stock was $110 per share on March 25, 2011.