Curious, not for my own situation but might become relevant in the future.
What happens to the long term capital gains tax when companies do buybacks and stock splits?
As an example:
Let's say you buy one share for 100 USD. Company buys back half its shares that same year, stock price goes up to 200 USD as a result.
10 years later the share is now worth 1000 USD. Company does a 10:1 stock split, now you have 10 shares worth 100 USD.
At this point you sell everything. How much capital gains tax do you owe? Let's take the situation where you in the highest tax bracket.
Thanks!
What happens to the long term capital gains tax when companies do buybacks and stock splits?
As an example:
Let's say you buy one share for 100 USD. Company buys back half its shares that same year, stock price goes up to 200 USD as a result.
10 years later the share is now worth 1000 USD. Company does a 10:1 stock split, now you have 10 shares worth 100 USD.
At this point you sell everything. How much capital gains tax do you owe? Let's take the situation where you in the highest tax bracket.
Thanks!