When entering stock transactions how do I enter a stock split?

[byfaith]

I sold all my stock from one company last year (2017).  My first purchase was in 1997 with 2 subsequent purchases in 2001 and 2002.  In between these purchases and stock dividend re-investments, the stock split twice. How do I enter the splits... I have the date it was split, number of shares that were split, but I do not have the price per share for that date which is required.

[TomYoung · Accepted solution]

"I have the date it was split, number of shares that were split, but I do not have the price per share for that date which is required"

The market price of the shares on the date of the splits is completely irrelevant.  You're dealing with your basis here and the market price on the day of the splits has no bearing on your calculation of your basis.

All a split does is increase your number of shares and decrease you per share cost proportionately, leaving your overall basis unchanged.  Example:

1997 purchase of 150 shares @ $12.50 per share.  Total basis $1,875.00

If in 1999 the stock split 4 for 1.  That 1997 purchase is now 600 shares @ $3.125 per share.  Total basis is $1,875.00.

"I sold all my stock from one company last year (2017)."

As you sold all your shares you don't have to worry about splits at all, really, at least not in determining your overall profit.  Add up all the money you invested in the stocks: purchase in 1997, purchase in 2001, purchase in 2002, all dividend reinvestments.  That's your basis in ALL the stock.  And you sold ALL the stock, so you simply subtract your proceeds from your basis.  That's your total, overall profit, forgetting for the moment how the broker may report the sale in several pieces - short term covered, long term covered, long term.  That's the number you should come back to when you add all up all your sales.

There's no need what so ever to enter each and every purchase into TurboTax.  All you need do is enter the correct total basis for each sales category.

Start with the short term covered sale.  Your broker will tell you both the proceeds and the basis so simply enter those amounts.  You can put the word "various" in the date acquired.

Next enter the long term covered sale.  Again the broker will tell you both the proceeds and the basis so enter those figures right off the 1099-B, using "various" for the date acquired.

Subtract the basis you've entered for the two covered sales from your total basis previously determined.  That's the basis you'll use for the sale reported as long term, not covered.

Tom Young

[byfaith]

Thank you!