Detailed Answer
(a) The requirement is to determine the holding period
for preferred stock that was received in a nontaxable distribution
on common stock. Since the tax basis of the preferred stock is
determined in part by the basis of the common stock, the holding
period of the preferred stock includes the holding period of the
common stock (i.e., the holding period of the common stock
tacks on to the preferred stock). Thus, the holding period of the
preferred stock starts when the common stock was acquired,
January 2013.