The Motley Fool Discussion Boards
Financial Planning / Tax Strategies
|Subject: Re: Stock split||Date: 1/19/1999 8:06 PM|
|Author: TMFTaxes||Number: 8599 of 125218|
[[If I follow you on your explanation of split shares....correct me if i am wrong....If
i started out with say 30 shares @ $50. and now i have 120 after two splits,,and
then i sold 30 shares, the cost basis of those would be $50 , the next sale might
be @ $25 and so on?????]]
Nope...you are confusing yourself. I'll try again.
In your example, your original basis was 30 shares at $50/share...for a total cost of $1,500.
You now have 120 shares. So in order to compute your basis in all of these shares, you would divide $1,500 by 120 shares. This would give you a basis for EACH and EVERY share of $12.50 each.
So if you sold 30 shares, your total cost basis for those 30 shares would be $375.00 (30 shares X $12.50/share).
And this $12.50 basis is on EACH AND EVERY share that you own.
Hope this clears it up...
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