stock splits |Form 8949 Capital Gain & Wash Sales calculator software

Figure the basis of stock splits in the same way as stock dividends if identical stock is distributed on the stock held.

A stock split is one of  corporate actions that happens when a company changes the amounts of shares and adjusts the share’s price accordingly. A stock split  increases or decreases the number of shares in a public company. The price is adjusted such that the before and after market capitalization of the company remains the same and dilution does not occur.

For example, a company with 100 shares of stock priced at $20 per share. The market capitalization is 50 × $20, or $1000. The company splits its stock 2-for-1. There are now 100 shares of stock and each shareholder holds twice as many shares. The price of each share is adjusted to $10. The market capitalization is 100 × $10 = $1000, the same as before the split.

Stock splits are usually non-taxable. It is important to note that after a stock split, the number of shares you own in the security and the cost basis of those shares will change. Often stock splits are expressed as a fraction.  A two-for-one stock split is the most common – the investor receives one additional share for every share owned in the security.

After all trades executed during the tax year have been imported and matched correctly, you are ready to end of tax year for the next tax year.
With this function, you can check next tax year’s baseline position include year end open position and deferloss to each washsale position.

Let’s take the Tax year 2005 as an example. Please follow steps below to End the Tax Year:

1. Right-click the folder FY2005 under the specific account in the Account List and the following dialog box will pop up:You will see 2005 Year End Open Position & Defer Loss.
2. Confirm your open position with your December statements from your brokerage.If there is any unmatched position, you can check these:
   • Make sure to take unsettled trades on the December brokerage statement into account.
   • Make sure to adjust for securities referring stock splits, mergers, spinoffs or symbol name changes.Stock Splits | Mergers | Spinoffs | Changing Symbols
   • If there is anything wrong when you match your specific transaction
3. Click on Next button and the New Year Baseline Position dialog box will show:
   The baseline position contains Open Position (long, short)Learn more about: Long, Sell to Open
4. Click Finish to complete the progress. Then next tax year’s baseline position and defercost will display in next tax year’s (In this example, it is tax year 2006) Baseline window and data grid as the following:After end of the tax year, you will see,
   • the next tax year Baseline view icon will become icon .
   • the Finance year view icon will become icon

   Tips: Finance year view Icon means you have already done End of Tax Year.