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8 March, 04:06

5 years ago, an individual has invested $10,000 in aninvestment trust. Over those years, the trust has distributed $2,000, consisting of $1,600 of dividends and $400 of capital gains. The investor has reinvested these distributions in additional trust units. The investors aggregate current cost basis in the trust is:A. $10,000

B. $10,400

C. $11,600

D. $12,000

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  1. 8 March, 04:32
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    correct option is D. $12,000

    Explanation:

    given data

    invested = $10,000

    distributed = $2,000

    dividend = $160

    capital gain = $400

    solution

    As when investor beginning trust shares is $10,000 and 2,000 of distributions

    so that here all subject to tax in years tax return

    and here reinvestment in to new trust shares that is increase basis from $10,000 to $12,000

    so investor have capital gain when sell all the shares more than $12,000

    so here they have capital loss if sale less than $12,000

    so correct option is D. $12,000
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