Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (3) | Ignore Thread Prev Thread | Next Thread
Author: harbor991 One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121219  
Subject: Reporting cashed out fractional share Date: 12/22/2009 1:49 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
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
Print the post Back To Top
Author: ptheland Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 108107 of 121219
Subject: Re: Reporting cashed out fractional share Date: 12/22/2009 1:54 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 2
Is this the correct method to use?

Not quite.

The amount of cash you received is the sale price. The cost would be your original total cost (the price for all 501 shares plus the purchase commission) divided by 501. Subtract the cost from the sale price, and you have your gain or loss.

You don't need to worry about figuring up the sale price - your broker will report that on a 1099B. It should match the cash you actually receive into your account. Since this just happened, you might not have the cash yet, but you will soon.

--Peter

Print the post Back To Top
Author: harbor991 One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 108113 of 121219
Subject: Re: Reporting cashed out fractional share Date: 12/22/2009 11:33 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Peter,

Thanks so much for your reply. You guys are good!

harbor991

Print the post Back To Top
UnThreaded | Threaded | Whole Thread (3) | Ignore Thread Prev Thread | Next Thread
Advertisement