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Old 04-18-2015, 10:29 AM
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Capital Gains on Stock Sales

I bought Home Depot stock in 1983: 200 shares for $9,050 ($45.25 per share). It has split many times. I need to sell 2,000 shares now. What is my cost basis? I'm trying to determine my capital gains hit for 2015 taxes. Thank you!



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Old 04-18-2015, 07:39 PM
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Originally Posted by st20842 View Post
I bought Home Depot stock in 1983: 200 shares for $9,050 ($45.25 per share). It has split many times. I need to sell 2,000 shares now. What is my cost basis? I'm trying to determine my capital gains hit for 2015 taxes. Thank you!
In general, to account for your cost basis, you need to adjust for these splits. A history of your stock splits can usually be found on the
Home depot website under the link for investors; If they don't have a calculator they will probably have a least a history of splits. Us that history to figure it out. as there have been multiple splits, you MUST account for each one for accurate LTCG calculation on Sch D/f8949. the home depot splits its shares, this will affect your cost basis per share. while a split changes your number of shares outstanding, it is a cosmetic change that affects neither the actual value of the original investment, nor the current investment;






However, if the company's share price has fallen under its original basis and you invested another shares at this discounted price, this will change the total cost basis of your investment in the company. There are several issues that come up when numerous investments have been made. The IRS says that if you can identify the shares that have been sold, then their cost basis can be used. For example, if you sell the original 1k shares, your cost basis is $10, so at $10K. This is not always easy to do, so if you can't make this identification, the IRS says you need to use a FIFO method. Therefore, if you were to sell 1.5K shares, the first 1K shares would be based on the original or oldest cost basis of $10, followed by 500 shares at a cost basis of $5if the basis fell to $5 per share.



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