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papaduke101: "Thanks, JAFO."

Your welcome.

"I will await comments from some others may have another slant."

Second opinions are often good ideas.

"The xx and yy shares have specific cost basis for each provided by the parent company and I would use them if/when I were to sell the specific lots. Therefore, I do not know what you mean by a "zero basis"."

I may have misunderstood you, but it sounded like you wanted to re-allocate basis away from the xx and yy shares. How the parent establish basis?

"I would like to be able to maintain my original cost basis of the shares I had before these stock dividends were issued."

Let me try this another way.

But first a clarifying question. These were stock dividends, meaning that you received shares of stock in the company you already owned, and not spin-off distributions, where you received shares in a company formerly owned by the company you already owned?

In economic terms, a stock dividend is the same as a stock split -- and part of the basis of your original stock must be allocated to the split/dividend (and the basis of yoru original shares adjusted)and cannot be re-allocated back as you propose.

Regards, JAFO
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