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Split stock tax basis question

Old 07-14-2015, 07:46 AM
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Default Split stock tax basis question

I bought some SBUX 7/25/14. The stock split on 4/9/15. Is my one year holding period for all the stock including the split 7/26/15 or do I have to wait until 4/10/16 to sell the rest to get the lower cap gain?
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Old 07-14-2015, 08:15 AM
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Originally Posted by joe.giuliano View Post
I bought some SBUX 7/25/14. The stock split on 4/9/15. Is my one year holding period for all the stock including the split 7/26/15 or do I have to wait until 4/10/16 to sell the rest to get the lower cap gain?
It sounds like you bought the original (pre-split) shares on 7/25/2014, right? If so, you may sell any or all of the post-split shares on or after 7/26/15 and any capital gain will be long term for tax purposes. You must apportion the basis cost equally of all original shares across all post-split shares.

Reference:
http://www.fool.com/school/taxes/1999/taxes990312.htm
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Old 07-14-2015, 08:17 AM
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The holding period is based on the original purchase date of 7/25/14.
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Old 07-14-2015, 08:22 AM
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Originally Posted by Sprockets View Post
The holding period is based on the original purchase date of 7/25/14.
Thanks. That is what I thought and I hate reading the tax code. Have my lazy shoes on.
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Old 07-14-2015, 08:23 AM
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In theory you really didn't get anything new.
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Old 07-14-2015, 08:36 AM
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You're planning on selling SBUX? May I ask why?
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Old 07-14-2015, 08:44 AM
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Originally Posted by Jus Teasin View Post
You're planning on selling SBUX? May I ask why?
I think SBUX and Howard Schultz are the cat's meow and I will keep half of my position. It is kind of priced to perfection and I have a just under 50% move. About a year ago they had a slight earning miss and the stock moved lower for a short time. I had been keeping an eye on it and picked up a much larger position than I usually do. Selling half seems prudent though in five or ten years I will most likely regret this move.
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Old 07-14-2015, 02:51 PM
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I guess if you're going to sell, today would have been a good day.
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Old 07-14-2015, 04:31 PM
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Need to wait till the 26th to get the lower cap gain. Big difference b/w 39% and 15%
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