[Anonymous]

If I have 100 shares with a basis of $100 (1$/share), then it gets split into 200 shares, is my tax basis per share $.50 or $2?

I’m seeing both. Thanks.

[Not a Quitter]

I'm pretty sure your basis adjusts to 50 cents per share.

FAR- 85 I'm DONE!
BEC- 75
REG- 60,60,75
AUD- 74,74,83

CPAExcel used for BEC, AUD, REG
Exam Matrix used for FAR plus NINJA Blitz, cpareviewforfree and a little CPAExcel

[leglock]

This is a topic worth learning because people generally understand a 2 for 1 split but may get confused if it is a ratio other than 2 for 1.

if you had 100 shares with $100 basis, then after a 2 for 1 split:

shares you end up with are 100 x 2 / 1 = 200

and

basis is 100 x 1/2 = 50

value before and after split is 10,000

if it's a 3 for 2 stock split, this means you get three shares for every 2 you have, so:

shares after split is 100 x 3/2 = 150

and basis of these new shares is $100 x 2/3 = 66.67

value before and after split is 10,000

so you will simply make a fraction out of the split to calculate shares after split, and use the reciprocal of that fraction to calculate the basis of the new shares.

[LongShot]

Another easy to understand this is if you x shares of stock you paid $y for, take whatever total shares you have after the split (2x, 3x, doesn't matter) and divide by the same $y you paid for it. Total basis doesn't change, it's just allocated equally among all shares owned after the split.

FAR - 75
AUD - 72; 87
REG - 64; 74; 84
BEC - 88

Done!!

[Author]

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