tax

Ms. Clark paid $62,000 for 25,000 shares of Acme, Inc. stock. This year Acme declared bankruptcy, and the shareholders were notified that their stock has no value. Which of the following statements is false?

The character of any recognized loss is ordinary.

Otto Oltorf, an executive with Sky, Inc., reports the following income: Salary: $275,000 Interest income: $2,000 Qualified dividend income: $4,500 Passive loss from partnership interest: $8,200 Passive income from rental activities: $4,200 Otto's AGI is ______.

$281,500 Reason: Otto may offset the $4,200 passive income using the passive loss generated in the current year. Therefore, he computes AGI as $275,000 + $2,000 + $4,500 + 0 ($4,200 passive income offset by passive loss) = $281,500. Otto will have a passive loss carryforward of $4,000.

This year, Ms. Leonard invested $29,000 in a mutual fund. During the year, the investment yielded the following: Qualified dividend income: $1,200 Dividends reinvested: $1,000 Nontaxable distributions: $800 Ms. Leonard's basis at year end is ______.

$29,200 Reason: Purchase price of $29,000 plus dividends reinvested of $1,000 less nontaxable distributions of $800 = $29,200.

John is subject to a 15% marginal tax rate on ordinary income. This year, he received two dividend distributions, $1,200 from Highpoint, Inc. and $2,000 from Lowmark, Inc. The Form 1099 indicates the dividend from Highpoint is a qualified dividend. John's tax liability on the dividend income is ______.

$300 Reason: The Highpoint dividend (qualified) is subject to a 0% preferential rate, while the $2,000 dividend from Lowmark (not qualified) is subject to a 15% rate ($300 tax).

This year, Mr. Fox invested $45,000 in a mutual fund. During the year, the investment yielded the following: Qualified dividend income: $2,400 Dividends reinvested: $2,000 Non taxable distributions: $1,200 Mr. Fox's basis at year end is ______.

$45,800 Reason: Purchase price of $45,000 plus dividends reinvested of $2,000 less nontaxable distributions of $1,200 = $45,800.

Mr. Black received a $12,000 dividend from Whitehawk, Inc. Mr. Black's Form 1099 indicated that $8,000 was a qualified dividend and $4,000 was a nontaxable distribution. Which of the following best describes Mr. Black's tax consequences?

$8,000 dividend income taxed at a preferential rate, a $4,000 reduction in basis for Black's investment in Whitehawk.

Mr. and Mrs. Rylander are married and file a joint income tax return. This year, Mr. Rylander gifted $50,000 to their favorite grandchild to support him during college. Which of the following statements are true? (Choose all that apply.)

-If gift splitting is not elected, $15,000 is excluded and $35,000 is considered a gift by Mr. Rylander for federal tax purposes. -If gift splitting is elected, $30,000 is excluded and $10,000 is considered gifted by Mr. Rylander and $10,000 by Mrs. Rylander.

The taxable estate ______. (Select all that apply.)

-is reduced by transfers made to the surviving spouse -can be reduced to zero by transferring all of the assets to a charitable organization

Which of the following transactions would be classified into a special subcategory taxed at 28%? (Select all that apply.)

A gain from the sale of qualified small business stock purchased 3 years ago A gain recognized on the sale of a collection of baseball cards purchased 5 years ago

Which of the following transfers are treated as taxable gifts for federal gift tax purposes?

A gift to the taxpayer's niece used by the niece to support herself while in college

Which of the following statements about accelerated death benefits is false?

Accelerated death benefits have a policy objective targeted at relieving financial hardship for terminally or chronically ill taxpayers.

Which of the following statements is false regarding capital assets?

All long-term capital assets are taxed at a 28% tax rate.

Which of the following statements about the computation of gain or loss on the sale of shares of stock is true?

Amount realized from the sale includes cash and any noncash assets received.

Which of the following statements about an investment in undeveloped land are true? (Select all that apply.)

An investor can elect to capitalize interest expenses on a mortgage incurred to purchase the undeveloped land. An investor can elect to capitalize the related property taxes.

Mr. Adams purchased 200 shares of Tyco stock for $10/share. Broker's fees were $20 for the entire purchase. Three years later, Mr. Adams sold this investment for $15/share less a broker's fee of $20. Determine Mr. Adam's basis in the stock and gain on the sale.

Basis: $2,020; Gain: $960 Reason: Basis: (200 × $10) + $20 = $2,020. Proceeds from sale: (200 × $15) -$20 = $2,980. Gain: $2,980 - $2,020 = $960.

In 2011, Juan began purchasing shares in Pet Products, Inc. each month. This month, Juan sold half of his investment in Pet Products, Inc. Which of the following statements accurately describes the method Juan is permitted for tracking the basis in his investment in Pet Products?

Because Juan purchased shares over many months and cannot identify the basis of each share, he may use average cost or FIFO for tracking basis.

Which of the following statements about financial assets is true?

Because taxation occurs upon disposal of an invested asset, investors are able to defer taxation on wealth increases from appreciation.

Which statement does not accurately describe the tax consequences of rental real estate?

Capital expenditures from rental activities are always currently deductible in arriving at net profit. Reason: In general, capital expenditures must be capitalized and depreciated. The depreciation expense is deducted in arriving at net profit.

Moon Mutual Fund manages a diversified portfolio consisting of equity investments in both foreign and domestic corporations. This year, Cara received a $3,500 distribution from her investment in Moon Mutual Fund. Her Form 1099 reported that this distribution included: Ordinary dividend income: $2,100 Qualified dividend income: $1,200 Nontaxable distribution: $200 Which of the following statements correctly identify the tax consequences to Cara?

Cara reports $3,300 total income with $1,200 taxed at a preferential rate.

Which of the following situations describes a nontaxable exchange? (Select all that apply.)

Common stock in one company is exchanged for common stock in another company pursuant to a reorganization agreement. Preferred stock is exchanged for preferred stock in the same company. Common stock is exchanged for common stock (same class of stock) in the same company. Common stock is exchanged for common stock (different class) in the same company

On November 4, 2018, Erin purchased a U.S. Treasury bill that matured on February 28, 2019. She redeemed the bond on February 28, 2019. Which of the following statements regarding her federal taxable income is true?

Erin will defer recognition of all interest income until 2019.

Which of the following statements about Section 1244 stock is false?

Gain recognized on the sale of Section 1244 stock is always taxed at the taxpayer's marginal tax rate. Reason: The maximum tax rate on gains from Section 1244 stock is 28%. However, a portion of the gain may be exempt from taxation altogether.

Which of the following are typical nontax costs that may offset the preferential tax treatment of annuities and life insurance contracts? (Select all that apply.)

Higher commissions and fees than nontax favored investments Fees for surrendering policies prior to the first annuity payment

Bob Kranske died this year. This year, his taxable income is $225,000, which reflects a 32% marginal tax rate. During his lifetime, he made taxable gifts that were far in excess of the lifetime exclusion. Mr. Kranske's taxable estate is $22.4 million. Which of the following statements is true?

His taxable estate is subject to a 40% tax rate.

Mrs. Linn exchanged 200 shares of Necker, Inc. common stock for 300 shares of Granger Corporation stock. Mrs. Linn's basis in Necker stock was $12,200 and the FMV of Granger stock was $22,000 on the date of the exchange. Which of the following statements is false?

If the exchange is pursuant to a reorganization involving both companies, Ms. Linn's basis in Granger stock is $22,000.

Match the term with the correct description.

Inside build up- The increase in the cash surrender value Cash surrender value-Reflects the investment element available to the policyholder should the policy be liquidated prior to the death of the insured Premiums- The payment or series of payments to secure an insurance contract

Which of the following statements is true regarding the deductibility of investment interest expense?

Investment interest expense is deductible only to the extent of net investment income.

Which of the following situations does not reflect a passive ownership interest?

Jim and Jerry own a management company. Owners hire them to manage their rental property.

For the current year, John reports the following information: Salary (from W-2): $95,000 Rent received from lease of rental home: $24,000 Maintenance cost for rental home: $10,000 Property tax on rental home: $2,000 Purchase of new air conditioning unit for rental home: $6,000 Depreciation expense on air conditioning unit: $1,200 Which of the following statement is false?

John will report $10,800 net profit from rental activities in AGI. Reason: Rent of $24,000 less deductible expenses of $13,200 for a profit of $10,800. Deductible expenses include maintenance ($10,000), property taxes ($2,000), and depreciation ($1,200).

This year, Kris paid $8,000 of interest on funds borrowed to purchase securities for her investment portfolio. Her AGI was $90,000 which included $5,000 of net investment income. Which statement best describes her tax situation related to investment interest expense?

Kris may deduct $5,000 of investment interest expense as an itemized deduction and carryforward the remaining $3,000.

Which of the following statements regarding discounts related to debt obligations is false?

Market discounts and original issue discounts on debt obligations are subject to the same tax treatment.

Which of the following statements about material participation is true?

Material participation means that the owner is involved in the day-to-day operations on a regular, continuous, and substantial basis.

In 2008, Mike Walters purchased a life insurance policy that would pay a $250,000 death benefit to his beneficiary, his daughter Lana. Since he established the policy, Mike has paid $44,000 in premiums. This year, Mike liquidated the policy for the $52,000 cash surrender value. Which of the following statements is true?

Mike recognizes $8,000 of ordinary income upon liquidation. Reason: Mike recognizes $8,000 of ordinary income upon liquidation -- the $52,000 cash surrender value in excess of the $44,000 in premiums paid.

Mr. Chen owns and manages several rental properties. This year, his business generated a $36,000 loss. His AGI before consideration of this loss is $124,000 (none of which includes passive income). Which of the following statements best describes the tax consequence of the rental income?

Mr. Chen may deduct $13,000 and $23,000 is suspended. Reason: Mr. Chen's ability to deduct rental loss is limited because his AGI exceeds $100,000. The limitation is $12,000 (half the excess over $100,000). Therefore, Mr. Chen may deduct $13,000 ($25,000 - $12,000).

Which of the following statements about the gift tax is true?

No gift tax is paid until the total of all gifts by a taxpayer exceeds the lifetime exclusion amount ($5 million indexed annually).

Which of the following statements is false with regard to the classification of undeveloped land as inventory or an investment for tax purposes?

Owning a parcel of land that is subdivided into smaller lots would provide support that the land is held for investment.

Which of the following statements regarding inflation adjusted debt instruments is false?

Periodic interest payments are calculated based on a fixed principal value.

Which of the following types of income are taxed at a preferential rate? (Select all that apply.)

Qualified dividend income Long-term capital gains

Which of the following statements is true regarding private activity bonds?

Since 1986, the interest from private activity bonds represents an AMT preference item.

Which of the following statements is false regarding bonds issued by state and local governments?

The bond will likely offer a higher rate of interest than corporate bonds with the same degree of risk. Reason: The bond will likely offer a lower rate of interest as corporate bonds with the same degree of risk.

Which of the following statements is true regarding the structure of life insurance policies?

The cash surrender value represents the amount that would be received if a policy is liquidated before the death of the insured.

Which of the following statements is false regarding the deductibility of investment interest expense?

The deduction is limited to net investment income which includes all capital gains and all dividend income.

Which of the following statements is false regarding passive activities?

The income generated is never characterized as ordinary.

Which of the following statements about qualified dividend income is false?

The preferential rate for qualified dividend income is eliminated for taxpayers with the highest marginal tax rate. Reason: All taxpayers benefit from a preferential tax rate on qualified dividends. Taxpayers with the highest marginal rate are permitted a preferential rate of 20% on qualified dividends.

Which of the following is true regarding investment income?

The primary source of investment income is invested capital.

Which of the following statements is false?

The tax consequences of business and investment activities are generally the same.

Which of the following statements about the gift tax is false?

The tax is imposed on the recipient of the gift.

Which of the following statements regarding annuity contracts is false?

The taxable portion of the distribution is taxed at a preferential capital gains rate.

Which of the following statements about the U.S. transfer tax system is false?

The transfer tax system has had the same structure since it was enacted in 1916.

Last year, Robert sold one block of securities that resulted in an $11,000 long-term capital loss, generating a carryforward of $8,000. This year, Robert engaged in three transactions which resulted in a $4,000 net long-term capital gain. Before considering these transactions, his AGI this year was $120,000. Which of the following statements is true?

This year, Robert will report AGI of $117,000 and a long-term capital loss carryforward of $1,000. Reason: Combining the carryforward of $8,000 and the long-term capital gain of $4,000 this year results in a $4,000 long-term capital loss in the current year. Robert may recognize a net capital loss of $3,000, reducing AGI to $117,000, and carryforward the remaining $1,000 long-term capital loss.

True or false: Life insurance policies and annuity contracts enjoy preferential tax status. The benefit of this status is typically offset by higher fees and lower rates of return for these savings vehicles relative to other investment options that are not subject to preferential tax status.

True

The Medicare contribution tax ______. (Select all that apply.)

applies to taxpayers who exceed an AGI threshold. is assessed on net investment income

Suspended losses from passive activities ______.

are deducted upon disposition of the interest in the passive activity

Investment expenses, other than interest expense, ______.

are not deductible

The gift tax is ______.

assessed on inter vivos transfers

Indicate which of the following statements is false: Debt instruments issued by the U.S. government ______.

generate interest that is tax exempt for U.S. federal income tax purposes

A cash basis taxpayer recognizes dividend income ______.

in the period in which the cash is actually or constructively received

Inherited property that ______.

is appreciated in value is never taxed on the appreciation that occurs prior to the date of death

Investment interest expense ______. (Select all that apply.)

is not deductible to the extent it is attributable to tax-exempt income may be deductible as an itemized deduction

The primary purpose of purchasing a PIG (passive income generator) is to ______.

realize the tax benefit of a suspended loss currently

Municipal bond interest is ______.

tax exempt for U.S. income tax purposes

Interest generated by U.S. debt instruments, such as Treasury notes or Series EE bonds, is generally ______ for state income tax purposes and ______ for U.S. income tax purposes.

tax exempt; taxable

This year, Mr. Baxter recognized a $22,000 long-term capital gain and a $6,700 short-term capital loss. For tax purposes, Mr. Baxter ______.

will net the transactions and include in AGI a $15,300 long-term capital gain

This year, Mr. Hicks reported a $7,000 long-term capital loss and a $3,200 short-term capital gain. For tax purposes, Mr. Hicks ______.

will net the transactions and include in income a $3,800 long-term capital loss

Mr. Reynolds passed away this year. On his date of death, the fair market value of all of the assets in the estate was $2.2 million and his debts totaled $250,000. His estate paid $10,000 in legal fees, donated $20,000 to United Way, bequeathed $600,000 to his spouse, and the remaining $1.32 million was to be divided among his children. His taxable estate is ______.

$1.32 million Reason: $2.2 million - $250,000 (debts) - $10,000 (legal fees in administering the estate) - $20,000 (charitable organization) - $600,000 (spousal exemption) = $1.320,000.

Enrique paid $96,000 for an annuity contract that will pay $1,600 per month for life. Based on Enrique's age, his expected return on the contract is $400,000. This year, Enrique received payments totaling $19,200. How much is taxable to Enrique each year?

$14,592 Reason: Enrique's premiums represent 24% ($96,000/$400,000). Thus, it is assumed that 24% of the annuity payments (24% × $19,200 = $4,608) reflect a return of investment and is nontaxable. The remaining $14,592 ($19,200 - $4,608) is taxable.

On June 5 of the current year, Mr. Schaffer liquidated the following three investments: ABC Stock: Purchased two years ago and sold at a $4,000 gain. DEF Stock: Purchased 6 months ago and sold at a $2,000 loss. GHI Stock: Purchased four years ago and sold at a $500 gain. For tax purposes, Mr. Schaffer will report a ______.

$2,500 net long-term capital gain

Melanie's mother died two years ago. Her estate was not subject to any federal estate tax. Melanie inherited a parcel of land from her mother. The fair market value of the land was $120,000 at the time of her mother's death and was originally purchased 12 years ago for $80,000. This year, Melanie sold the land for $140,000. Melanie's gain or loss on the sale is ______.

$20,000 Reason: Melanie gets a step-up in basis to $120,000. Thus, her gain is $20,000 (proceeds of $140,000 less step-up basis of $120,000).

Oscar paid $45,000 for an annuity contract that will pay $800 per month for life. Based on Oscar's age, his expected return on the contract is $281,250. This year, Oscar received payments totaling $9,600. How much is taxable to Oscar?

$8,064 Reason: Oscar's premiums represent 16% ($45,000/$281,250). Thus, it is assumed that 16% of the annual annuity payments (16% × $9,600 = $1,536) reflect a return of investment and are nontaxable. The remaining $8,064 ($9,600 - $1,536) is taxable.

Elena has AGI of $93,000 before considering the following transactions that occurred this year: 200 shares of Alpha Corp sold at a $12,000 long term capital loss. 100 shares of Beta Inc. sold at a $3,000 long term capital gain. 150 shares of Chi Company sold at a $3,000 short term capital gain. Elena will report AGI of ______.

$90,000 Reason: Elena has a net $3,000 short-term capital gain and a net $9,000 long-term capital loss which combine to a $6,000 long-term capital loss. She may deduct $3,000 in the current year and may carry forward the remaining $3,000.

Which of the following statements best reflects the maximum transfer a married couple may make without the transfer being considered a gift for gift tax purposes?

A married couple may transfer up to $30,000 each year to as many individuals as they would like.

In 2013, Maggie purchased 1,000 shares in a mutual fund for $5,200. Maggie participates in a dividend reinvestment program. Her reinvested dividends were: 2013: $480 2014: $500 2015: $520 At year end, Maggie held a total of 1,250 shares (1,000 from the original purchase plus 250 through the dividend reinvestment plan.) At this time, she sold 100 shares for $736. Assume Maggie uses an average cost method, determine her total basis for the 100 shares sold and the gain on the sale.

Basis: $536; Gain: $200 Reason: Basis: $5,200 + $480 + $500 + $520 = $6,700. $6,700/1,250 share = $5.36/share. Total basis for 100 shares = $536. Gain: $736 - $536 = $200.

Phillip recognized the following capital gains and losses this year: Short-term capital gain: $12,000 Short-term capital loss: ($6,000) Long-term capital gain: $43,000 Long-term capital loss: (60,000) If AGI before consideration of these gains and losses is $140,000, Phillip will report AGI of $ on his Form 1040 and will carry forward a capital loss of $.

Blank 1: 137,000 or 137000 Blank 2: 8000 or 8,000

Ms. Barrett purchased 1,000 shares of Tillman stock for a price of $14,000 ($14/share). The fees associated with the transaction were $60. The following year, Ms. Barrett sold this investment for $12,600 and incurred additional fees of $70 on the sale. Ms.Barrett's basis in the investment is $, and she realized a $ (gain/loss) on the sale.

Blank 1: 14060 or 14,060 Blank 2: 1,530 or 1530 Blank 3: loss

John and his father invested in a rental property. They have agreed to have an equal interest in the investment. The property costs $200,000. John contributes $80,000 and his father contributes $120,000. For gift tax purposes, his father is deemed to have made a $ gift to John.

Blank 1: 20000 or 20,000

Ms. Meade reports the following income: Salary: $210,000 Interest and qualified dividend income: $5,000 Suspended passive loss from previous years: $6,000 Passive income from rental activities: $4,200 Ms Meade's AGI is $, and she has a suspended passive loss of $.

Blank 1: 215000 or 215,000 Blank 2: 1800 or 1,800

Mr. and Mrs. Ricketts have determined that their assets have accumulated beyond what they will need in retirement. They would like to use the annual gift tax exclusion to distribute cash to their children and their families. They have two married children and a total of six grandchildren. The maximum they may distribute under the annual gift tax exclusion is $.

Blank 1: 300000 or 300,000

Mr. and Mrs. Wyatt report $350,000 of AGI which includes salaries of $320,000, net profit of $22,000 from Ms.Wyatt's cake decorating business, capital gains of $3,000, and dividend income of $5,000. Their Medicare contribution tax is $.

Blank 1: 304

This year, Ms. Richtor had $7,200 of net investment income which included $500 of investment related expenses. She considered the following income items in her computation of net investment income. $6,000 qualified dividend income $200 municipal bond interest $5,700 interest from corporate bonds $2,000 short-term capital gains Ms Richtor also paid $13,100 of investment interest expense. Assuming Ms. Richtor elected to take advantage of a preferential rate whenever possible, her deduction for investment interest expense is $.

Blank 1: 7,200 or 7200

Riley, an unmarried taxpayer, reports $220,000 of AGI which includes his salary of $180,000, $22,000 in dividend income, and $18,000 in capital gains. He has no related investment activities. His Medicare contribution tax is $.

Blank 1: 760

Brock Company made a new public offering of 1-year corporate bonds with 2% stated rate of interest. Ashley purchased for $18,000 Brock Company bonds with a face value of $20,000, reflecting a $2,000 discount. Ashley will receive annual interest payments of $400. Which of the following statements are true regarding the tax consequences of this investment? (Select all that apply.)

If Ashley redeems the bonds for the face value at maturity, the redemption will not result in any taxable income. Ashley will recognize the $400 of interest income each year as it is received.

Ryan owns a beach front condo which he rents to vacationers. Which of the following statements is false?

If Ryan materially participates in the management of this property, the income will not be passive.

Which of the following statements is false regarding the tax consequences associated with life insurance policies? (Select all that apply.)

If a policy is redeemed prior to the death of the insured, the total cash surrender value is taxed as ordinary income. Reason: The cash surrender value in excess of premiums paid is taxed as ordinary income.

Which of the following statements is true about a decedent's estate?

Life insurance death benefits paid upon the death of the insured to a named beneficiary are included in the taxable estate.

Which of the following statements regarding preferential rates on capital gains is false?

Long-term capital gains have always been taxed at lower rates than ordinary income.

Last year, Lyle acquired an ownership interest in a partnership. He does not materially participate. Last year, he was allocated a $10,000 loss. This year, Lyle made the decision to dispose of the ownership interest. Which of the following statements is true?

Lyle will deduct the suspended loss in the current year.

Lynn owns and manages an apartment complex. This year, the complex generated a $40,000 net loss. Her AGI before consideration of this loss is $65,000 (none of which includes passive income). Which of the following statements best describes the tax consequence of the rental income?

Lynn may deduct $25,000 and report $40,000 AGI. Reason: Because Lynn's AGI is less than $100,000, she may deduct $25,000 of the rental loss currently. The remaining $15,000 is suspended and carried forward to a future year.

Three years ago, Ms. Plummer loaned $15,000 to XXY partnership in exchange for an interest bearing note. This year, XXY dissolved and announced to its creditors that it was insolvent and unable to pay its creditors. Which of the following statements is true?

Ms. Plummer may deduct $15,000 as a capital loss.

Ms. Tebow paid $4,200 in interest expense on a mortgage related to her investment in undeveloped land and $2,000 in property taxes. Her AGI is $120,000 which includes $3,200 of interest income. Which of the following statements is false?

Ms. Tebow may currently report $4,200 of investment interest expense.

Match the term with the description.

Mutual fund-A diversified portfolio on securities RIC-A company that owns and manages mutual funds Securities- Financial assets in the form of equity interest

Which of the following statements about dividend income is false?

Preferential rates are available to both individuals and corporations receiving qualified dividends. Reason: Preferential rates on qualified dividends are available only to individual investors.

Which of the following types of income reported on Form 1099 may either be taxed at a preferential rate or exempt from tax altogether? (Select all that apply.)

Qualified dividend distributions Nontaxable distributions Long-term capital gains distributions

Which of the following statements is false about taxation of gains and losses from security transactions?

Realized and unrealized gains from appreciation of investment assets are taxed currently.

Which of the following is not a factor that determines whether an investment meets the requirements to receive the preferential tax treatment for qualified small business stock under Section 1244?

The profitability of the corporation

Last year, Shana purchased a limited interest in a business partnership which is her only passive activity. Last year, she was allocated $15,000 of the partnership's ordinary business loss. This year, she was allocated $7,200 of the partnership's ordinary business income. Which of the following statements is false?

This year, Shana has a carryforward of $7,800 in losses that may be used for up to three years. Reason: There is no time limit on the use of suspended losses.

The transfer tax system has multiple integrated components including a(n) ______. (Select all that apply.)

gift tax generation skipping tax estate tax

As ownership interest in undeveloped land ______.

may be subject to different tax implications depending on the business intent of the particular owner Reason: Undeveloped land may be classified as either inventory or an investment depending on the intent of the owner. Each carries different tax implications.

Mr. Beede, a cash basis taxpayer, owns shares of Freeman, Inc. in his investment portfolio. On December 10, 2019, Freeman, Inc. declared a dividend. Mr. Beede's share of the dividend was direct deposited to his account on December 30, 2019. Due to the holiday schedule, Mr. Beede did not have access to the funds until January 2, 2020. The dividend income is ______.

taxable to Mr. Beede in 2019

Ms. Frost, a cash basis taxpayer, owns shares of XYZ, Inc. in her investment portfolio and participates in a dividend reinvestment program. Therefore, her share of the 4th quarter 2019 dividend paid by XYZ was reinvested in additional shares of XYZ. The dividend is ______.

taxable to Ms. Frost in 2019