Stock split calculator: new shares, new price and adjusted cost basis per share
In a split, shares are multiplied by new ÷ old and the price is divided by the same ratio, so a 3-for-1 split turns 10 shares at $90 into 30 shares at $30, and a 1-for-10 reverse split turns 100 shares at $2 into 10 shares at $20. Your total cost basis stays the same and is spread over the new share count. Enter the ratio, your shares and, optionally, the price and basis; the calculator also shows what happens to a fractional share when the company pays cash in lieu. To see the tax on a later sale, use the capital gains tax calculator.
Stock split calculator
Shares after the split:
10
- Fractional share cashed out: 0.5 of a share (before rounding, 10.5 shares)
- Price per share after the split: $20.00
- Cost basis per share after the split: $20.00
- Cash in lieu at the post-split price you entered: $10.00
- Basis allocated to the fractional share: $10.00
- Gain or loss on the fractional share (cash minus allocated basis): $0.00
- Basis of the shares you keep: $200.00
Assumptions
- New shares = shares held × new ÷ old; price after the split = price before × old ÷ new. A reverse split is a ratio such as 1 for 10.
- Basis per share = total basis ÷ shares after the split, the method IRS Publication 550 gives when identical stock is distributed. The total basis does not change.
- Cash in lieu uses the post-split price you enter; a company's own notice sets the real payment. Tax on the cash is not calculated.
Worked examples
The first case uses the figures printed in IRS Publication 550; the others are FedRateCalc arithmetic from the same code as the calculator.
| Split | Shares after | Price after | Basis per share | Cash in lieu |
|---|---|---|---|---|
| 3-for-1 on 1 share bought for $45 (Publication 550 example: two new shares for each share held) | 3 | not entered | $15.00 | none |
| 4-for-1 on 25 shares at $200, cost basis $5,000 | 100 | $50.00 | $50.00 | none |
| 3-for-2 on 5 shares at $90, cost basis $450, cash in lieu | 7 (plus 0.5 cashed out) | $60.00 | $60.00 | $30.00 |
| 1-for-10 reverse split on 105 shares at $2.00, cost basis $210, cash in lieu | 10 (plus 0.5 cashed out) | $20.00 | $20.00 | $10.00 |
What splits and reverse splits are
Investor.gov, the SEC's investor education site, defines a stock split in its glossary:
“An increase in the number of shares of a corporation's stock without a change in the shareholders' equity. Companies often split shares of their stock to make them more affordable to investors. Unlike issuing new shares, a stock split does not dilute the ownership interests of existing shareholders. For example, if you own 100 shares of a company that trades at $100 per share and the company declares a two-for-one stock split, you will own 200 shares at $50 per share immediately after the split. If the company pays a dividend, your dividends paid per share also will fall proportionately.”
and describes a reverse split:
“When a company completes a reverse stock split, each outstanding share of the company is converted into a fraction of a share. For example, if a company declares a one for ten reverse stock split, every ten shares that you own will be converted into a single share. If you owned 10,000 shares of the company before the reverse stock split, you will own a total of 1,000 shares after the reverse stock split.”
“A company may declare a reverse stock split in an effort to increase the trading price of its shares – for example, when it believes the trading price is too low to attract investors to purchase shares, or in an attempt to regain compliance with minimum bid price requirements of an exchange on which its shares trade. In some reverse stock splits, small shareholders are "cashed out" (receiving a proportionate amount of cash in lieu of partial shares) so that they no longer own the company’s shares. Investors may lose money as a result of fluctuations in trading prices following reverse stock splits.”
How the IRS adjusts cost basis and treats fractional shares
IRS Publication 550 (2025) says about changes to the basis of stock:
“The basis of stock must be adjusted for certain events that occur after purchase. For example, if you receive more stock from nontaxable stock dividends or stock splits, you must reduce the basis of your original stock.”
For a split, it points to its rule for stock dividends:
“Figure the basis of stock splits in the same way as stock dividends if identical stock is distributed on the stock held.”
That rule for identical stock, with its two examples:
“If the new stock you received as a nontaxable dividend is identical to the old stock on which the dividend was declared, divide the adjusted basis of the old stock by the number of shares of old and new stock. The result is your basis for each share of stock.”
“You owned one share of common stock that you bought for $45. The corporation distributed two new shares of common stock for each share held. You then had three shares of common stock. Your basis in each share is $15 ($45 ÷ 3).”
“You owned two shares of common stock. You bought one for $30 and the other for $45. The corporation distributed two new shares of common stock for each share held. You had six shares after the distribution—three with a basis of $10 each ($30 ÷ 3) and three with a basis of $15 each ($45 ÷ 3).”
Two cases are figured differently. If the new stock is not identical to the old stock:
“If the new stock you received as a nontaxable dividend is not identical to the old stock on which it was declared, the basis of the new stock is figured differently. Divide the adjusted basis of the old stock between the old and the new stock in the ratio of the fair market value of each lot of stock to the total fair market value of both lots on the date of distribution of the new stock.”
and if the stock dividend is taxable:
“If your stock dividend is taxable when you receive it, the basis of your new stock is its fair market value on the date of distribution. The basis of your old stock does not change.”
For stock bought in several lots, the publication says:
“Figure the basis of stock dividends received on stock you bought at various times and at different prices by allocating to each lot of stock the share of the stock dividends due to it.”
The calculator applies only the identical-stock rule, to one lot at a time; the other cases above are not calculated. On fractional shares, Publication 550 says, in its discussion of stock dividends:
“You may not own enough stock in a corporation to receive a full share of stock if the corporation declares a stock dividend. However, the corporation may set up a plan in which fractional shares are not issued but instead are sold, and the cash proceeds are given to the shareholders. Any cash you receive for fractional shares under such a plan is treated as an amount realized on the sale of the fractional shares. Report this transaction on Form 8949.”
“A corporation that declares a stock dividend may issue you a scrip certificate that entitles you to a fractional share. The certificate generally is nontaxable when you receive it. If you choose to have the corporation sell the certificate for you and give you the proceeds, your gain or loss is the difference between the proceeds and the part of your basis in the corporation's stock allocated to the certificate. However, if you receive a scrip certificate that you can choose to redeem for cash instead of stock, the certificate is taxable when you receive it. You must include its fair market value in income on the date you receive it.”
That passage is written for stock dividends; the calculator applies the same arithmetic to the fractional share of a split or reverse split, as FedRateCalc's assumption. To see how a particular action affected your basis, check the issuer's Form 8937 and your broker's Form 1099-B; a sale is reported on Form 8949. The IRS page About Form 8937 says:
“File Form 8937 if you are an issuer of a specified security that takes an organizational action that affects the basis of that security.”
What the calculator assumes
- New shares = shares held × new ÷ old. The new price = the old price × old ÷ new. A reverse split is a ratio such as 1 for 10; a 1-for-1 ratio changes nothing.
- Basis per share = total basis ÷ shares after the split, before any cash in lieu is paid. The total basis is not changed by the split.
- With cash in lieu, whole shares are kept and the fraction is paid at the post-split price you enter, because the amount a company pays is set in its own notice. The gain or loss shown is the cash minus the basis allocated to the fraction. Tax on it is not calculated.
- Shares, the ratio and the price must be above zero, and the basis cannot be negative. For stock bought in several lots, run each lot separately. The stock average calculator shows the weighted average of several purchases.
Frequently asked questions
How does a stock split change the number of shares and the price?
New shares = old shares × (new ÷ old) and new price = old price × (old ÷ new). Investor.gov (SEC) gives the example of 100 shares at $100 in a two-for-one split becoming 200 shares at $50 immediately after the split, and says a split does not dilute existing shareholders' ownership interests.
What is a reverse stock split?
Investor.gov (SEC) says that in a reverse split each share becomes a fraction of a share: in a one for ten reverse split every ten shares become one, so 10,000 shares become 1,000. The calculator takes a reverse split as a ratio such as 1-for-10 and multiplies the price by ten.
How is cost basis per share adjusted after a split?
IRS Publication 550 says to figure the basis of stock splits the same way as stock dividends if identical stock is distributed: divide the adjusted basis of the old stock by the number of shares after the split. One share bought for $45 that becomes three shares has a basis of $15 each. If the new stock is not identical, or a stock dividend is taxable, Publication 550 gives different rules that this calculator does not apply.
What happens to a fractional share?
Investor.gov (SEC) says that in some reverse splits small shareholders are cashed out, receiving a proportionate amount of cash in lieu of partial shares. IRS Publication 550 says, in its discussion of stock dividends, that cash received for fractional shares under a company plan is treated as an amount realized on a sale and reported on Form 8949; FedRateCalc applies that passage to splits and reverse splits as an assumption, because the publication words it for stock dividends. The IRS page About Form 8937 says "File Form 8937 if you are an issuer of a specified security that takes an organizational action that affects the basis of that security.", so the issuer's Form 8937 and your broker's Form 1099-B are where to check how an action affected your basis.
Which price does the cash in lieu use?
FedRateCalc multiplies the fraction by the post-split price you enter, because the amount a company pays is set in its own notice and is not known to the calculator. The gain or loss shown is the cash minus the basis allocated to the fraction, which is FedRateCalc arithmetic based on the allocation described in IRS Publication 550.
Does a split change what my shares are worth?
Investor.gov (SEC) defines a stock split as an increase in the number of shares without a change in the shareholders' equity, and the example in its glossary shows 100 shares at $100 becoming 200 shares at $50. The calculator reports the new share count and price from the ratio; it does not predict where the price goes afterwards.
Related calculators and guides
Sources
Pages were read on November 6, 2026. The Investor.gov pages were read from Internet Archive captures taken on the dates shown, because investor.gov refused plain requests. IRS Publication 550 is the 2025 edition as published on irs.gov; the IRS page About Form 8937 was read directly.
- IRS: Publication 550 (2025), Investment Income and Expenses
- IRS: About Form 8937, Report of Organizational Actions Affecting Basis of Securities
- Investor.gov (SEC): Stock Split, Internet Archive capture of October 11, 2026
- Investor.gov (SEC): Reverse Stock Splits, Internet Archive capture of October 26, 2026
Reviewed November 6, 2026. FedRateCalc is not affiliated with the IRS, the SEC or FINRA; their sites are the official sources, and any later change they publish overrides this site. Results are estimates from the numbers you enter, not financial or tax advice.