Cost Basis of stock after acquistion

Forum|Forum|1 year ago
March 17, 2025
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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?

Best answer by JohnB5677

It will require a few calculations.

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

JohnB5677Answer

It will require a few calculations.

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

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