Shares of stock are generally bought and sold in whole number amounts. That is, you can buy 50 or 75 or 107 shares, but you can't buy fractions of a shares. In some cases, however, companies issue fractional shares, usually as part of a dividend reinvestment plan, a merger or as the result of a 3-to-2 stock split. If the value of your stock holdings drops, you can calculate the losses associated with fractional shares.

1. Determine the cost basis for a share of stock at the time you received the fractional share. For example, if you held a stock that had a 3-to-2 stock split that resulted in a fractional share in your account, the value of one share of stock immediately after the split would be your cost basis. If you accumulated a fractional share as a result of repeated dividend reinvestments, find the average value of one share by adding the value of the stock at each reinvestment period and dividing by the number of periods. For example, if you received three reinvestments, and the stock was valued at $100, $90 and $80 at each reinvestment, the average share value is $90 ($270 divided by three).

2. Subtract the value of one share of stock at the time you sold it from the cost basis to determine the loss on a single share. For example, if the cost basis was $100, and the price of one share is $70 at the time of your stock sale, the loss on a single share is $30.

3. Multiply the loss on a single share by your fractional holding to determine the loss for the fractional share. For example, if you have half of a share of stock that lost $30 per share, your loss is $15 (30 divided by two) . If you own a decimal portion of a stock, such as .137 of a share, multiply the loss per share by the decimal to find the fractional loss. For example, a $30 loss per share times .137 equals a loss on the fractional share of $4.11.

#### Tip

- Calculate losses from cash received in lieu of a fractional share the same way as if you had received the fractional share.

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