how stock splits affect cost basis
if the company splits its shares this will affect your cost basis per share but not the actual value of the original investment or the current investment continuing with the above example suppose the company issues a 2 1 stock split where one old share gets you two new shares you can calculate your cost basis per share in two ways cost basis of gifted or inherited sharesin the event that the shares were given to you as a gift your cost basis is the cost basis of the original holder who gave you the gift if the shares are trading at a lower price than when the shares were gifted the lower rate is the cost basis if the shares were given to you as an inheritance then the cost basis of the shares for you as the inheritor is the current market price of the shares on the date of the original owner s death many factors will affect your cost basis and eventually your taxes when you decide to sell if your true cost basis is unclear please consult a financial advisor accountant or tax lawyer cost basis and futures contractsregarding futures the cost basis is the difference between a commodity s local spot price and its associated futures price for example if a particular corn futures contract happens to be trading at 3 50 while the current market price of the commodity today is 3 10 there is a 40 cent cost basis if the reverse were true with the future contract trading at 3 10 and the spot price being 3 50 the cost basis would be negative 40 cents as a cost basis can be positive or negative depending on the prices involved the local spot price represents the prevailing price for the underlying asset while the price listed in a futures contract refers to a rate that would be given at a specified point in the future futures prices vary from contract to contract depending on the month when they are set to expire as with other investment mechanisms the spot price fluctuates depending on current local market conditions as the delivery date approaches the price of futures and the spot price shift closer together 