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Financial Planning / Tax Strategies


Subject:  Multiple splits and cost basis Date:  2/8/2001  5:06 PM
Author:  Edssam Number:  45982 of 127613

Many moons ago, I purchased 3 shares of IBM stock for $1,284.00 Now,after 4 splits,I have a total of 48 shares.
The first split was a 25% dividend.I received the dividend check for $232.00. ( I did report it on that year's 1040) Therefore,I still owned 3 shares for a total value of $965.00
Further splits were (2)2:1 and (1) 4:1
Many question is... What is my cost basis ?...the original $1,284 or the value of the 3 shares after I cashed in the dividend? I believe it is the
later, but I am not positive.

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