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I am an AT&T shareholder and recieved AWE stock as a spin-off. They automatically sold my fractional share of AWE and gave me the cash in lieu. Since I have bought several lots of AT&T (and AWE now) as well as all the dividends that were reinvested, I am unsure what lot should I use to consider the tax cost basis for the fractional shares that were sold off. Typically, it should be the first lot that I bought, but I heard that since it is a spin-off or because it is a fractional share, I should just cost average all my lots to determine the cost basis. What is the correct way?

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