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Hello everyone. I like to do my own taxes, however I'm relatively inexperienced in handling capital gains. I've found the information here much more reliable (and less confusing) than other places on the web, and I was hoping that someone could guide me through the calculation of cost basis in the two scenarios below.

Let's assume for simplicity's sake that all the gains will be long-term, so there's no need to differentiate ST from LT. There are also no losses, and I'm ignoring commissions.

Scenario 1

1. Bought 100 shares of ABC Company @ $10/share for total of $1,000
2. ABC's 100 shares pay a dividend of $30, reinvested at @ $15/share
3. Bought 50 shares of ABC Company @ $20/share for a total of $1,000
4. Sold all 152 shares of ABC Company at $30/share for $4,560.

Is my cost basis $2,000 or do I need to account for the dividend reinvestment as well?


Scenario 2

1. Bought 100 shares of ABC Company @ $10/share for total of $1,000
2. ABC increases to $20/share
3. ABC divests XYZ Co, shareholders receive 1.5 XYZ per share of ABC.
4. As a result, ABC decreases to $13/share. XYZ trades at $4.67/share.
5. I now have 100 shares of ABC @ $13 and 150 shares of XYZ @ $4.67

My cost basis for ABC was $1,000 before the spinoff. How do I determine my basis for ABC and XYZ afterward?


Any help is very much appreciated!

Matt
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