When a stock splits, if the split ratio is anything other than 2 for 1, you might end up with a fraction of a share. Rather than issue a portion of a share, the company pays you cash instead. Your brokerage firm then reports the "cash in lieu" (often denoted as CIL) payment as sales proceeds on your Form 1099-B. Use our handy stock split calculator to compute the cost basis you have in those fractional shares. This will reduce your taxable income.
Don't pay tax on all your "cash in lieu" payments! You have basis!
Click on the image of the "cash in lieu" stock split calculator to the right to access our handy tool. It has data for recent stock splits of companies such as AIG, Assisted Living Concepts, and Coeur D'Alene Mines already provided, or else input your own data.
Stock Split Calculator for Cash in Lieu
It is especially beneficial to allocate cost basis to the fractional share in cases such as American International Group (AIG). With the major losses that most AIG investors have incurred, allocating cost basis can turn a taxable gain item into a tax-deductible capital loss.
Stock splits for many widely-held stocks are listed, excluding 2 for 1 stock splits which would not result in any fractional shares.
The calculator also works for reverse splits and for dividends paid in stock, rather than cash (unless they are "payment in kind" dividends.) The calculator can be used for the new cost basis of the 3% stock dividend usually paid by Tootsie Roll (TR) annually. This is simply a case of a stock split with a ratio of 1.03 per share.
The calculator also works for the stock dividends recently paid by First Horizon (FHN) where cash was paid in lieu of fractional shares. However, for some of the First Horizon stock dividends (10/1/08 and 1/1/09), the fractional shares were not redeemed, and the calculator should not be used since it assumes that cash in lieu was always paid.
If you know of other stock splits that result in fractional shares, please help us build our database for the benefit of all users. Please send us the details so that we can add it to the table of pre-filled values in the stock split calculator.
Information provided is intended solely for cash-basis U.S. citizen individual taxpayers and is believed to be accurate for most cases but is not guaranteed. Always consult your personal tax advisor about your own situation. Suggestions are most welcome. Please email our webmaster @ costbasis.com with your comments. If this website has been helpful to you, please consider making a donation to support our efforts.