How do I report cash in lieu from a fractional share sold when there was a stock split or merger?
When there is a fractional share left over after a stock split, company merger, or other type of corporate action, cash will often be given the shareholder for that fractional share. It is typically a very small amount of money. The cash in lieu of a fractional share is a stock sale of that fractional share of stock. So it needs to be reported as a stock sale on the capital gain screen.
The sales price would be the amount of cash received. Technically, you should allocate part of the cost basis of your stock to the fractional share that was sold and enter that cost basis. However, practically speaking, many people just enter zero as the cost basis since the cash in lieu is such a small amount and then the cost basis in your remaining stock does not have to be adjusted at all. The sales date would be the day the cash in lieu was received. The purchase date of the stock is the same as the purchase date for the rest of the company stock you are holding.
The sales price would be the amount of cash received. Technically, you should allocate part of the cost basis of your stock to the fractional share that was sold and enter that cost basis. However, practically speaking, many people just enter zero as the cost basis since the cash in lieu is such a small amount and then the cost basis in your remaining stock does not have to be adjusted at all. The sales date would be the day the cash in lieu was received. The purchase date of the stock is the same as the purchase date for the rest of the company stock you are holding.
