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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121114  
Subject: Re: Stock split Date: 1/19/1999 8:06 PM
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[[If I follow you on your explanation of split shares....correct me if i am wrong....If
i started out with say 30 shares @ $50. and now i have 120 after two splits,,and
then i sold 30 shares, the cost basis of those would be $50 , the next sale might
be @ $25 and so on?????]]

Nope...you are confusing yourself. I'll try again.

In your example, your original basis was 30 shares at $50/share...for a total cost of $1,500.

You now have 120 shares. So in order to compute your basis in all of these shares, you would divide $1,500 by 120 shares. This would give you a basis for EACH and EVERY share of $12.50 each.

So if you sold 30 shares, your total cost basis for those 30 shares would be $375.00 (30 shares X $12.50/share).

And this $12.50 basis is on EACH AND EVERY share that you own.

Hope this clears it up...
TMF Taxes
Roy
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