in general, The cost basis of any investment is the original value of an asset adjusted for stock splits, dividends and capital distributions. It is used to calculate the capital gain or loss on an investment for tax purposes. With respect to stock, basis may be difficult to calculate since shareholders may hold stock over a period of many years; or participate in a dividend reinvestment plan . Additionally, companies may split, merge or spin off their shares. several types of events require you to adjust the cost basis of shares you own. For example , a stock split changes the basis inverse to the split ratio. So a 2-for-1 split cuts the cost basis per share in half. A merger or spin-off of a company in which you own shares changes the basis depending on how the terms of the deal affect the per share price of the stock for that company. Since 2011, Brokers are now required to file an informational return with the IRS each year which reports gross proceeds from the sale of stock together with the taxpayer’s adjusted basis. Brokers must not only report basis as the amount of cash paid or credited for the purchase of stock but must also reflect adjustments for commissions and fees as well as other events that affect basis, such as a stock split. I guess you need to contact stock broker for professional help |