Stock merger???

[DTS]

Something new has come to me and I don't know how to handle it.

1099-B shows a merger, no share price or quantity, just the amount of the "merger". However, the brokerage adjusted basis sheet shows 124sh with a basis.

Do I just treat this like an ordinary sale of stock? If not, how do I show this?

Thank you, Dennis

[Brian EA]

Something new has come to me and I don't know how to handle it.

1099-B shows a merger, no share price or quantity, just the amount of the "merger". However, the brokerage adjusted basis sheet shows 124sh with a basis.

Do I just treat this like an ordinary sale of stock? If not, how do I show this?

Thank you, Dennis

If that is all the info you have then you will have to work with it. use that as the basis and show it as an ordinary sale of stock. Ask the client how long they have held it for .

[DTS]

Brian

I have all the info I would need to report a sale, as it's all on the brokerage gain/loss sheet. What threw me off was the 1099-B, which is not showing any of this, except for the "merger" price.

Dennis

[Brian EA]

I have all the info I would need to report a sale, as it's all on the brokerage gain/loss sheet. What threw me off was the 1099-B, which is not showing any of this, except for the "merger" price.

Dennis

Its an ordinary sale.

good luck

[LawrenceGR]

Not so Fast

If this is a merger and no shares were exchanged it should be treated as a zero basis. I just had one come in as part of the Sprint-Nextel merger I put it on a sch D no basis LTCG since the shares never traded hands. This would then increase the basis for the time when the stock is actually sold. I'm sure there will be opinions forthcoming

[Bees Knees]

Mergers under Section 355 are tax free to the shareholder. Section 355(a)(1) says that if a shareholder receives new stock in exchange for old stock under the rules described in Section 355, then no gain or loss is recognized on the transaction. You simply carry over the basis of the old stock into the new stock.

However, if any cash is distributed along with the new stock, that amount is subject to gain or loss treatement.

[Matt Sova]

Just got one

I just met with a client that has the Sprint-Nextel stuff. The 1099-B amount is 83.25. Then when you look at the detail attached it has the Original stock with the original date of purchase and the basis, along with the sale date and price (which is way higher than the 83.25 shown on the 1099). However, the gain is 83.25.

So, as LawrenceGR stated you could put in the sale price with 0 basis, or report it as shown in the detail. Either way they will have a LTCG if over 1 year of 83.25.

[Brian EA]

Something new has come to me and I don't know how to handle it.

1099-B shows a merger, no share price or quantity, just the amount of the "merger". However, the brokerage adjusted basis sheet shows 124sh with a basis.

Do I just treat this like an ordinary sale of stock? If not, how do I show this?

Thank you, Dennis

Let us start over with this thread.

The 1099-B shows all the info- basis, sales price etc.

The question is ; how do you treat this sale of stock.

It is an ordinary sale of stock.

Do not let merger get in the way

[LawrenceGR]

Was it actually a sale?

Does the 1099 show that was a sale? If not see my other post. If indeed 124sh changed hands then I agree with Brian.

[DTS]

Sorry...

for just getting back to all of you.

Thank you all for helping out. I was suppose to meet with this client last night, but he had to reschedule until Saturday afternoon. I will get to the bottom of this and post what the answer is. Either way, according to your posts, I have my answers!

Thanks, again.
Dennis