After a reverse stock split where fractional shares are rounded up (no CIL payment is offered), how do I account for the value of the received fractional share?

[ijmc27]

More broadly, in stock split cases where CIL is not offered but fractional shares are either rounded up or down, the stock holder is either gaining or losing part of a share.  I would assume the value of the fractional share whether it's a loss or gain can be used to adjust the cost basis.  Is this correct?

[TomYoung · Accepted solution]

Generally speaking a split has no effect on your basis, unless some CIL is received in which case you can assign some basis to the "sale" of the fractional share. 

Unless there's some sort of "income" or "cost" effect reported in your income tax return associated with a rounding up or down, in the absence of CIL I'd think your original basis simply carries over to to you new holdings.

(I must admit I've never encountered a "no CIL/round up or down situation.  Company involved?)

Tom Young

[ijmc27]

Thanks for your answer; xG Technology (XGTI)

[sunk818]

Its no different than buying and selling the same stock. One unclear part to me is the tax implication if the company receives a new ticker (OTC -> NASDAQ). If it is a new ticker, is sell taxed based on execution of the reverse stock split date or when you purchased the stock pre-split?