You owned 100 shares of stock in BigCo, Inc., when it did a tax-free stock split (or “stock dividend"). Now you have 200 shares! You had paid $50 per share when you bought your original 100 shares. After the stock split, what is your tax basis in – your original 100 shares? your “new” 100 shares?
You owned 100 shares of stock in BigCo, Inc., when it did a tax-free stock split (or “stock dividend"). Now you have 200 shares! You had paid $50 per share when you bought your original 100 shares. After the stock split, what is your tax basis in – your original 100 shares? your “new” 100 shares?
Chapter14: Property Transactions: Determination Of Gain Or Loss And Basis Considerations
Section: Chapter Questions
Problem 41P
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You owned 100 shares of stock in BigCo, Inc., when it did a tax-free stock split (or “stock dividend"). Now you have 200 shares!
You had paid $50 per share when you bought your original 100 shares. After the stock split, what is your tax basis in –
- your original 100 shares?
- your “new” 100 shares?
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