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Pmac531
New Member

How do I report reverse stock splits that result in zero shares?

I bought 909 shares on NVCN on Robinhood in 1/2018.  They had a 100 to 1 reverse split with fractional shares rounded down and no cash in lieu on 09/21/2018 leaving me with 9 shares and then another similar 10 to 1 reverse split on 07/02/2019 leaving me with zero shares and no cash.  Robinhood says they won't issue me any type of tax document that reflects this information since there was no sale so how do I claim the loss?

6 Replies
tagteam
Level 15

How do I report reverse stock splits that result in zero shares?


@Pmac531 wrote:

Robinhood says they won't issue me any type of tax document that reflects this information since there was no sale so how do I claim the loss?


The stock is not worthless (yet) and you should have a fractional share (.9) that the corp might have rounded up to a full share on their books. You should contact your broker for confirmation. 

 

If indeed the shares you bought are now worthless, then you have a capital loss in the year they became worthless (presumably this year).

Anonymous
Not applicable

How do I report reverse stock splits that result in zero shares?

the periodic Robinhood statements should have details of the split leaving you with no shares.    since there was no sale, it may not appear on the 1099-B

if it your interest is truly worthless at the end of 2019, it can be reported as a capital loss. 

the important thing is that the end of the year statement,  (not necessarily the tax reporting form) either show no shares or if it does, the value must be $0 according to IRS rules.  

on the 8949 input i would put NVCN - worthless

 

you might want to see this

https://finance.zacks.com/report-loss-worthless-securities-taxes-3180.html

Pmac531
New Member

How do I report reverse stock splits that result in zero shares?

The reverse split said fractional shares would be rounded down which in this case means to zero shares.  Also Robinhood does not support fractional shares.  If I had these in my Schwab account are you saying I would have 0.9 shares? I don't think so because of this "

no fractional Common Shares shall be issued in connection with the Consolidation.  Where the Consolidation would otherwise result in a shareholder of the Company being entitled to a fractional Common Share, the number of post-Consolidation Common Shares issued to such shareholder shall be rounded down to the next lesser whole number of common Shares;

"

 

tagteam
Level 15

How do I report reverse stock splits that result in zero shares?

The corp actually rounded up (fractional) shares to a whole number, provided the fraction was greater than 0.5, when they did the first reverse split. So, if you had 0.9, that would rounded up to one full share.

 

It would be reasonable to assume that they would do the same with respect to the latest reverse split.

Pmac531
New Member

How do I report reverse stock splits that result in zero shares?

After I posted I noticed they rounded up on the first one but confirmed they did not on the second one (which is pretty sketchy) so I definitely have zero shares in my Robinhood account.

tagteam
Level 15

How do I report reverse stock splits that result in zero shares?

Then you have a capital loss - sales proceeds of $0 less your cost basis.

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