Bat corporation distributes stock rights with a $20,000 fmv to its common stock shareholders. the $20,000 value of the stock rights at the time of distribution is less than 15% of the value of the underlying stock. which of the following statements is true? a. a shareholder cannot allocate any basis to the rights. b.the holding period for the rights begins on the day the rights are distributed in all cases. c.a shareholder must allocate basis to the rights based on the relative fmvs of the stock and the rights. d.the basis in the rights is zero unless a shareholder makes a valid election to allocate basis to the rights.

the correct option is c

answera major piece of legislation affecting the financial industry and containing significant privacy provisions for individuals;

of the three mortgage options that demarco and tanya have to choose from, the balloon payment mortgage would be their best option, over adjustable payment and fixed payment plans.ultimately, the balloon payment plan would save demarco and tanya overall, in interest, would cost less monthly, and they would only have to make these payments for 8 years, opposing to 30 years for adjustable or fixed payment plans. 

overall, demarco and tanya would save $80,811 if they chose balloon payments over fixed payments, and would save $116,711 if they choose balloon payments over adjustable payments. benefits with choosing fixed payments over adjustable payments is that, in the end, the payments will still be $836.30 a month, while with adjustable payments, the initial monthly payments will be $763.38 to $1082.70 a month, ultimately leading to a more costly purchase. benefits with choosing fixed payments over balloon payments are not present. benefits in choosing adjustable payments over is that it has a lower interest rate, and starts with lower monthly payments initially. benefits in choosing adjustable payments over balloon payments include a lower interest rate, and lower initial monthly payments. benefits in choosing balloon payments over fixed payments include lower interest rates, lower overall price, lower monthly payments, takes less time to pay off, and does not require a downpayment. benefits in choosing balloon payments over adjustable payments include, lower monthly payments (when averaged), takes less time to pay off, and lower overall price.

hence, option c, balloon payments, is the best option for demarco and tanya to make this purchase, for it will save them a minimum of $80811, and a maximum of $116,711.