Which of the following statements is correct about donations by nonresident aliens?

The statement regarding donations of bonds being taxable based on business situs is correct because it reflects how the Internal Revenue Code treats the taxation of certain assets based on their location and the status of the donor. For nonresident aliens, the determination of whether a donation is subject to tax can depend on where the property is located.

When it comes to bonds, if they have a business situs in the United States, then the gift of those bonds is subject to the donor's tax. This means that the jurisdiction in which the bonds are primarily considered to be situated plays a vital role in determining tax liability for donations from nonresident aliens.

In contrast, donations of domestic shares are not always taxable; there are specific circumstances under which they may be exempt. Similarly, donations of foreign stock are typically not taxable due to the nature of how U.S. tax laws apply to nonresident aliens. Not all franchises are exempt from donor's tax, as the determination of tax liability can vary based on various factors, including the nature of the asset and relevant tax laws.