I'm sorry that I was unclear.
In your example, the cost basis of the original share of stock is $50 and the right is valued by shareholder services at $3.23 even though the right was issued to you at no cost.
Before the right was issued, the cost basis of the one share of stock is $50.
After the right was issued, the cost basis of the original share is allocated over both the original share and the right. The computation would be:
Value of one share $50.00 50.00 / 53.23 = .9393 X $50.00 = $46.97 rounds to $47
Value of one right $ 3.23 3.23 / 53.23 = .0607 X $50.00 = $ 3.03 rounds to $ 3
$53.23 $50.00 $50
Enter $3 as the cost basis of the right. $47 remains the cost basis of the original share.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
