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URL:  http://boards.fool.com/reporting-cashed-out-fractional-share-28179161.aspx

Subject:  Reporting cashed out fractional share Date:  12/22/2009  1:49 AM
Author:  harbor991 Number:  108106 of 121338

Hello,

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?

Thanks,

harbor991
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