I'm attempting to help a relative figure the cost basis of Chevron shares bought over a number of years. The relative has kept a cost basis tally up until a 2 for 1 split in 2004. Chevron's site lists a record date and a payable date for the split. Which price do I use? How does one figure the cost basis at a split?
In figuring cost basis of a split stock the price is irrelevant. Just divide the cost basis before the split by 2 to get the cost basis after the split. He didn't put anymore money into the stock and he didn't gain anything by the split. He just owned twice as many shares worth as much each but the same amount in total.
Oops! Typing too fast. Shares were worth half as much each.
I'm attempting to help a relative figure the cost basis of Chevron shares bought over a number of years. The relative has kept a cost basis tally up until a 2 for 1 split in 2004. As has already been mentioned, just divide the previous per share basis by 2.Unless the relative has sold everything, you're going to need to do this by block, not in the aggregate. I find the easiest way is to just write on the purchase confirmation "mm/dd/2004 2/1 split," the new number of shares in that block, and the new per-share basis for that block.Phil
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