Calculate your adjusted cost basis per share after a stock split. When a stock splits, your cost basis per share changes — even though your total investment value doesn't. Getting this right is essential for accurate capital gains calculations when you sell. This free tool does the math instantly.
When a company splits its stock, the IRS requires you to adjust your cost basis per share proportionally. The total cost basis stays the same, but it is spread across more shares. Failing to adjust your cost basis correctly leads to overpaying capital gains tax.
New Cost Basis Per Share = Original Cost Basis Per Share ÷ Split Ratio
Or equivalently: Total Cost Paid ÷ New Number of Shares
| Metric | Before Split | After Split |
|---|---|---|
| Shares Owned | 50 shares | 200 shares |
| Cost Basis Per Share | $320.00 | $80.00 |
| Total Cost Basis | $16,000 | $16,000 |
| Market Price | ~$499/share | ~$125/share |
| Unrealized Gain | $8,950 | $8,950 (unchanged) |
If a stock has split multiple times since you purchased it, you need to account for each split. For example, if you bought Apple before the 2014 (7-for-1) and 2020 (4-for-1) splits, your cost basis has been adjusted by a factor of 28× (7 × 4). Use the calculator above once for each split, using the output as the input for the next split.
If you bought shares in the same company at different times and prices (multiple tax lots), you need to decide which cost basis method to use. Each has different tax implications:
| Method | How It Works | Best For |
|---|---|---|
| FIFO (First In, First Out) | Oldest shares sold first. IRS default for most accounts. | Rising market; maximizes long-term holding periods |
| LIFO (Last In, First Out) | Most recently purchased shares sold first. | Falling market; may reduce short-term gains |
| Specific Identification | You choose exactly which shares to sell. | Most tax-flexible; requires good record keeping |
| Average Cost | Average price across all lots. Mutual funds default. | Simplest for frequent purchasers (e.g. DRIPs) |
A stock split changes your cost basis per share but not your total cost basis. Your total amount invested stays the same. The per-share cost basis is divided by the split ratio. For example, a $200/share basis becomes $50/share after a 4-for-1 split.
No. A stock split is not a taxable event. You do not owe any tax when a split occurs. Tax only applies when you eventually sell the shares, at which point you use the adjusted (post-split) cost basis to calculate your capital gain or loss.
No. Your holding period is not affected by a stock split. The new shares you receive from the split are treated as if you acquired them on the same date as your original purchase. This matters for the long-term vs. short-term capital gains tax rate distinction (1-year threshold).
You do not report the split itself. You only report when you sell. On Schedule D / Form 8949, use your adjusted cost basis per share (original cost ÷ split ratio), your original purchase date, and the proceeds from your sale. Your broker's 1099-B should reflect the adjusted cost basis if the split occurred while the shares were held there.
If you've lost records of the original purchase price, you may be able to find it through old brokerage statements, trade confirmations, or your broker's website. If truly unavailable, the IRS may require you to use $0 as your basis (meaning the full sale price is taxable). A tax professional can help with cost basis reconstruction.