How do I report stock received as a bonus for investing in company?

[erniebotte]

Purchased 20,000 shares and receive additional 5,000 as bonus is this reportable income or does it change my cost basis?

[MichaelDC · Accepted solution]

The cost basis of the full 25,000 shares will be the amount that you paid for the lot regardless if you got some as a bonus or not. 

Consider it like a 5:4 stock split. If you purchased 20,000 for $100,000 ($5/share) and the stock split 5:4, you now have 25,000 for $100,000 ($4/share).

Please feel free to post any additional details or questions in the comment section, especially if you received the bonus from your employer.

[erniebotte]

Details were buying a convertible note which gave me the shares as a bonus and  the right to convert the note to stock. Where it began as a note does that impact the cost basis idea?

[MichaelDC]

Thanks. You must have sensed my curiosity about the bonus. No impact. Your basis is your basis. Good luck.

[erniebotte]

One last question what is the date of purchase when I sell the stock, is it the date bought the note or date when converted to stock

[MichaelDC]

The date you bought the note.