Tia Owns 2,000 Shares of Bass Corporation Common Stock with an $80,000

Multiple Choice

Tia owns 2,000 shares of Bass Corporation common stock with an $80,000 basis. Bass distributes a nontaxable preferred stock dividend. When the preferred stock is distributed, it has an FMV of $60,000 and the FMV of the 2,000 common stock shares is $180,000. The basis of the preferred stock is

A) $0.
B) $20,000.
C) $60,000.
D) $80,000.