Tax Facts

7513 / How is a shareholder taxed on a stock split?

Updated: October 20, 2026 at 02:42 PM
A stock split is treated in the same manner as a stock dividend.1 Therefore, a stock split is generally a nontaxable event for the shareholder (see Q 7509). The tax basis and holding period of the “new” stock received in a stock split is determined as discussed in Q 7510.




1.   IRC § 305(a).


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