In the mid 1990's I purchased shares in Citicorp (then Citibank). By 2001 I had about 800 shares. They did a 10 for 10 split in 2011.
I sold half my shares in 2014. How can I best figure out cost basis for this?
Answers | 2
I am very familiar with this. It was a reverse split. HUGE difference.
Most capital gains tax software (sch D) can address this. Your accountant should also be able to address it.
Here is a general formula for calculating basis on reverse splits:
Calculate your original basis for all of the shares you purchased, including commissions, by Multiply the number of shares purchased by the price per share. Add the commission paid to figure your total basis in the stocks. Calculate the number of shares you have after the reverse stock split by dividing the number of shares you originally owned by the number of old shares that are equal to one new share. Divide the total basis by the number of shares you have after the stock split to calculate the average cost basis.
Feel free to contact me directly to discuss further.
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