What is ezra gross income from the receipt

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Question - In January 2020, Ezra purchased 2,000 shares of Gold Utility Mutual Fund for $20,000. In June, Ezra received an additional 100 shares as a dividend, in lieu of receiving $1,000 in cash dividends. In December, the company declared a two-for-one stock split. Ezra received an additional 2,100 shares, but there was no option to receive cash. At the time of the stock dividend in December and at the end of the year, the fund shares were trading for $5 per share. Also, at the end of the year, the fund offered to buy outstanding shares for $4.50. Ezra did not sell any shares during the year.

What is Ezra's gross income from the 100 shares received in June?

What is Ezra's gross income from the receipt of the 2,100 shares as a two-for-one stock split in December?

Should Ezra be required to recognize gross income in 2020 even though the fair market value of his investment at the end of the year was less than the fair market value at the beginning of the year? Explain.

Reference no: EM132943384

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