JBLU stock splitted 3:2 in Dec05. How do I calculate tax basis if I have 100 share before and 150 after split?

Question

On December 2005, there was a 3 for 2 stock split of JetBlue airlines. I had 100 shares before the split and 150 after the split.
I need to calculate the Tax basis of this stock. How do I determine that ? Thanks for your answers !

Answer 1

Your tax doesnt take place until you sell the shares.
When a stock splits the price automaticly drops to reflect the split, so you havent made anything from the split, you just have more shares.

When you do sell, it will be the total price you paid for all share subtracted from the total price you sell at (minus commissions). That will be the only figure you need on capital gains.

Answer 2

After a 3:2 split, the basis per share is 2/3 of what the basis was on the old shares.

Answer 3

The basis of the stock is your investment in the stock. If you paid $1500 for 100 shares, your basis is $15 per share. If the stock splits 3:2, you still paid $1500 but now you have 150 shares. So your basis is $10 per share.

Basis per share = (Price for the 100 shares)/150

Answer 4

Just divide the number of shares after the split into the total original purchase price. Your total investment hasn't changed, only the price per share.