In order to do a reverse stock split, you need to sell the entire stock position for the original cost basis. Be sure and put a memo detailing the reverse split on your Multiple Distribution sale screen.

Then you buy back the new "reverse split" share quantity for the original cost basis and using the original acquisition date. I would put a memo on this MD screen as well.

Also, you MUST change the tax code of the SOLD shares to "no tax effect" (Accounts|Tax code changes, choose correct sold account, select "no tax effect".) This will prevent the "sale" from hitting your Schedule D.

In Navigator 9.0 (Version 8.9.314 and later):

1. Note the balance, tax basis, and cost basis on the Asset & Liability Info screen for the security. Better yet, print the screen for later reference.
2. Start entering as a normal security sale transaction.
3. Select Yes to the Sold Investment prompt.
4. Use $0 as Debit amount since no cash is involved. The Multiple Distribution screen for security sales appears.
5. Change the Quantity Sold to the number of shares that you want to remove from the security.
6. Tab.
7. Select Yes to the Partial Sale prompt.
8. Change Tax Basis to $0 since there is no change in the tax basis. It does not matter if you delete the “Tax Basis” text or not.
9. Change the Credit on the first line to $0 since you are not changing the security’s balance.
10. Change the Capital Gains amount (if any) to $0 on the second line. You cannot delete this line.
11. Change the Unrealized Gains account (if any) to $0 on the third line. You cannot delete this line.
12. Select OK to complete the transaction.
13. View the Multiple Distribution to verify that the Quantity Sold is correct and the debit amount is $0.
14. Select OK to close the Multiple Distribution screen.
15. Open the Asset & Liability Info screen for the security.
16. Verify that the number of shares is the correct new amount.
17. Verify that the cost basis, tax basis, and account balance have not changed.
18. Select OK and Close to return to the Transaction Activity screen.
19. Select Accounts |Tax Code Changes to change the Tax Code of the partial sale account to No Tax Effect. Otherwise, the partial sale account will appear on the Schedule D report, albeit with a $0 gain.

1. Note the balance, tax basis, and cost basis on the Asset & Liability Info screen for the security. Better yet, print the screen for later reference.
2. Start entering as a normal security sale transaction.
3. Select Yesto the Sold Investment prompt.
4. Use $0 as Debit amount since no cash is involved. The Multiple Distribution screen for security sales appears.
5. Change the Quantity Sold to the number of shares that you want to remove from the security.
6. Tab.
7. Select Yes to the Partial Sale prompt.
8. Leave the Tax Basis as is. You will fix it later.
9. Change the Credit on the first line to $0 since you are not changing the security’s balance.
10. Change the Capital Gains amount (if any) to $0 on the second line.
11. Change the Unrealized Gains amount (if any) to $0 on the third line.
12. Select OK to complete the transaction.
13. View the Multiple Distribution to verify that the Quantity Sold is correct and the debit amount is $0.
14. Select OK to close the Multiple Distribution screen.
15. Select OK to close the message screen “Partial sold account not found.” The partial sale account exists, even though Navigator cannot find it. Note that if you need to delete this transaction, you will also need to delete the partial sale account manually.
16. Open the Asset & Liability Info screen for the security.
17. Change the Cost Basis and Tax Basis back to the original amount since they have not really changed.
18. Verify that the number of shares is the correct new amount.
19. Verify that the account balance has not changed.
20. Select OK and Close to return to the Transaction Activity screen.
21. Select Accounts |Tax Code Changes to change the Tax Code of the partial sale account to No Tax Effect. Otherwise, the partial sale account will appear on the Schedule D report, albeit with a $0 gain.