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New Member
posted Mar 29, 2021 4:25:52 PM

Good evening regarding the question "how did you receive this investment" why isn't "cash in leiu " an option? it was something that was mentioned and is most applicable

I received shares due to a corporate spin off and a fractional share was sold. None of the other options given are applicable

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1 Replies
Expert Alumni
Mar 31, 2021 3:44:39 PM

As long as you have the correct information for the sale of a stock (proceeds, holding period and cost or other basis), then how you obtained the stock is not terribly important. The program asks about how you obtained stock in order to guide subsequent interviews

 

"Cash in lieu" of stock is the same thing as receiving a fractional share of stock and immediately selling it - you just skip the part where the corporation gives you a fractional share of stock so you could turn around and immediately sell it. In your case, this would have been a stock split or stock dividend of sorts.

 

Corporations do this to simplify their records of outstanding stock, i.e. only whole shares are issued and outstanding.