Help calculating the basis of shares after a stock split/swap.?

Question

I had 50 shares of DUK (Duke Energy).
Now after a split last week I have the shares of Duke plus shares of SE (Spectra Energy). Mu DUK have dropped due to the split.

How do i calculate the cost basis of a. The old duke shares and b. the new SE shares?

Answer 1

This sounds like a spin-off, not a split.

Some of the cost basis of DUK will be allocated to SE. The question is, how much?

Banks and brokerages tend to use vendors like Commerce Clearing House (CCH) or ADP to get this kind of information. As an individual investor, your broker should be able to give you this data on your holdings with them. If not, you might want to contact the investor relations department of Duke and/or Spectra to see what they can tell you. Start by checking their website.

Hope it helps.

Answer 2

AZNYC is totally right. Please pay attention to his answer.

You've started off well by wanting to know how to do the calculation correctly. It might seem a bit tricky the first time around, but all spin-offs, splits, mergers, takeovers, etc have these subsequent tricky cost-base calculations. Next time it happens you'll have the big advantage of experience to draw upon. Good luck.

Answer 3

the foundation of the inventory is your investment interior the inventory. in case you paid $1500 for a hundred stocks, your foundation is $15 in line with share. If the inventory splits 3:2, you nevertheless paid $1500 yet now you have a hundred and fifty stocks. So your foundation is $10 in line with share. foundation in line with share = (fee for the a hundred stocks)/a hundred and fifty

Answer 4

calculate the cost of old share =total amount of money invested divided by 50. new shares =total money invested (same figure ) divided by number of se shares