What is the tax effect of receiving cash in lieu of a fractional share?
If you received cash in lieu of a fractional share, you will be treated as having sold the fractional share. As a result, you will report gain or loss on that sale equal to the difference between the amount of the cash you received and the tax basis allocated to the fractional share of AFG Common Stock. To determine the cost basis of full (and cash issued in lieu of fractional) shares issued as a result of a stock split, the pre-split cost basis of the underlying shares on which the split was paid should be allocated among the underlying shares and new shares and cash received as a result of the split. You should consult your tax advisor regarding this calculation as it applies to your particular interest.
Related Questions
- How should I have received my cash in lieu of a fractional share of Time Warner Cable common stock following the reverse stock split?
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