In 2016, Sam received the following corporate distributions: $1,500 dividend on stock held in a public corporation that offers a dividend reinvestment plan that lets him choose to use the dividend to buy (through an agent) more stock in the corporation at a price equal to its fair market value instead of receiving the dividends in cash. Sam chose to take part in the plan. $2,500 dividend on stock held in a public corporation that offers a dividend reinvestment plan that lets him choose to use the dividend to buy (through an agent) more stock in the corporation at a price less than its fair market value. The fair market value of shares Sam purchased through the plan on the dividend payment date in 2016 was $3,000. $2,000 return of capital distribution reported on Form 1099-DIV. Based on
the above information, how much ordinary dividend income must Sam report on his 2016 return?
a. $4,500
b. $4,000
c. $6,000
d. $6,500
Ans: a. $4,500
Business
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Which of the following is a major advantage of using direct mail?
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