Kalpesh, Although the example numbers you've chosen do make discussion a bit difficult, $2 proceeds for the 1/2 share with a cost basis of $2 per share, does have a $1 capital gain.
> On 07/13/2026 1:44 PM PDT Kalpesh Patel <[email protected]> wrote: > > > This might not be a GNC question as much as Commodities Trading 101 > question. > > > > So I have been trying to get my head wrapped around what exactly is a stock > split at a very fundamental level (leaving specifics of entering into > personal financial management software out). Mr. Ralls was nice enough to > give me how-to enter BHF split from MET back in February that took place on > July 18 2017; not exactly a stock split but a spin-off. Thanking him for > giving me a "fish" at that time. But now I want to "go fishing" myself for > how splits work and understand the mechanics of it. What is *incorrect* in > this not so elegant statements (and example): > > > > - Buy X shares for total of $Y on date ABC (example: 3 shares at $5 > = $15 total cost) > > - On the split date that is post ABC date, it splits at a ratio of > 2.5:1. My total number of shares increase by 1.5X plus original X for total > equal to 1.5X + X or 2.5X (example: 2.5*3 = 7.5 shares) -- I have not > mentioned any changes to cost basis here on purpose - original cost basis > remains as is but this simply increases number of share that I now have > > - Since I had odd number of shares so if I am paid cash in-lieu for > fractional shares, wouldn't the broker SELL my 0.5 shares at whatever the > going market price is and then deposit that proceeds into my account say $Z > amount (example: paid me $2) > > - Is capital gain on the fractional share: $Z - > ($Y/2.5X)*shares_sold (example: $2 - ($15/7.5)*0.5 = $2 - $1 = $1) > > > > Thanks. > > > > _______________________________________________ > gnucash-user mailing list > [email protected] > To update your subscription preferences or to unsubscribe: > https://lists.gnucash.org/mailman/listinfo/gnucash-user > ----- > Please remember to CC this list on all your replies. > You can do this by using Reply-To-List or Reply-All. _______________________________________________ gnucash-user mailing list [email protected] To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user ----- Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
