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Level 1
posted Mar 16, 2025 6:02:41 PM

Cost Basis of stock after acquistion

Trying to determine the cost basis of a stock after it has been acquired.  I owned ~4700 shares in a company with a cost basis of ~42K.  The company was purchased for stock and cash.  I received ~5300 shares and ~87K in cash.

So do I pay capital gains of $45K on the return of capital (87 - 42)?

What then is the cost basis for 5300 shares I received?

 

0 1 900
1 Best answer
Expert Alumni
Mar 17, 2025 4:27:53 AM

It will require a few calculations.

 

  1. You must get the original cost of the 5,300 shares.
  2. Add the $87K cash and the value of the 5,300 Shares
  3. Divide the $87K by the number from line 2
  4. Take percentage (line 2) X $42K
  5. This will be the percentage of the basis that will be used to offset the cash distribution of $87K.
  6. The balance will be the new basis of the 5,300 shares.

1 Replies
Expert Alumni
Mar 17, 2025 4:27:53 AM

It will require a few calculations.

 

  1. You must get the original cost of the 5,300 shares.
  2. Add the $87K cash and the value of the 5,300 Shares
  3. Divide the $87K by the number from line 2
  4. Take percentage (line 2) X $42K
  5. This will be the percentage of the basis that will be used to offset the cash distribution of $87K.
  6. The balance will be the new basis of the 5,300 shares.