A stock split changes your per-share cost basis but not your total cost basis. Divide your existing total basis by your new, post-split share count to get the new per-share basis; the total stays the same, aside from any cash received for a fractional share.
Worked example: 100 shares bought for a $1,000 total basis
This example uses an illustrative $1,000 purchase, run through five real, cited split ratios, so the ratios are real even though the purchase price is a generic example.
| Ticker | Split ratio | Basis per share before | Shares after | Basis per share after | Total basis |
|---|---|---|---|---|---|
| NVDA | 10-for-1 | $10.00 | 1,000 | $1.00 | $1,000 |
| AAPL | 4-for-1 | $10.00 | 400 | $2.50 | $1,000 |
| TSLA | 3-for-1 | $10.00 | 300 | $3.3333 | $1,000 |
| GOOGL | 20-for-1 | $10.00 | 2,000 | $0.50 | $1,000 |
| AMZN | 20-for-1 | $10.00 | 2,000 | $0.50 | $1,000 |
The general formula
New cost basis per share = old total cost basis / (old shares × split ratio). Equivalently, new per-share basis = old per-share basis ÷ ratio, where the ratio is new shares divided by old shares. A reverse split divides the share count and multiplies the per-share basis instead.
What does not change
- Total cost basis, aside from cash received in lieu of a fractional share.
- Your ownership percentage, from the split alone.
- Your holding period for the original shares.
This is general mechanics, not tax advice. Confirm your adjusted basis with your broker's 1099-B and consult a tax professional for your specific situation.
Frequently asked questions
Does a stock split change my total cost basis?
No. Total cost basis is unchanged by a split, aside from cash received for a fractional share; only the per-share basis and share count change.
Sources
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