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Financial Planning / Tax Strategies
|Subject: Reporting cashed out fractional share||Date: 12/22/2009 1:49 AM|
|Author: harbor991||Number: 108106 of 121338|
I owned 501 shares of SNS which I bought in a single transaction during October 2008 in a taxable account. On 12-19-09 (market closed) SNS initiated a 1:20 reverse stock split resulting in 500 of the shares converting to 25 shares. The remaining 1 fractional share did not convert and was cashed out by the broker.
I plan to report the cashed out 1 share on Schedule D at the closing market price on 12-18-09 before the split, and apply its proportional cost basis from the original purchase to arrive at the long-term capital gain. Is this the correct method to use?
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