How Do Stock Splits Affect Cost Basis. Suppose that stock you purchased above splits 3:1. Say, xyz bank was selling for $50 a share a couple of years.
To determine the cost of full and fractional shares issued as a result of stock splits and stock dividends, a portion of the cost basis of the underlying shares on which the split or dividend was paid should be allocated to the new shares received using the figures on the list of stock dividends and stock splits. A history of stock splits can usually be found on the corporate website under the link for investors. reverse splits are those in which you For a split (like 3:2 or 2:1 or 3:1), you increase the number of shares by the split factor, which necessarily reduces the per share cost basis.