Merger Iberdola/Scottish Power

[Gretel]

Client received cash plus Iberdola shares from Scottish Power/Iberdola merger. Cash is reported on 1099-B and I assume there is no basis for the cash received and all original basis is allocated to the new shares received. Date acquired for the cash distribution should be original purch.date of Scottish Power. Is that right?

I tried to find info on the web and in my resources but in vain. I also will try to see letter from merger, which should explain how to handle.

[jimmcg]

Letter from investment banker should explain proceedure for allocating old share basis between cash received and new shares received. Since cash and shares were received in the reorg. for old shares the basis from old shares goes to the cash received and the new shares in some equtable proportion, probably based on FMV at effective date of reorg. but see what the letter says.

[FEDUKE404]

Merger document

The Iberdrola transaction does not look like one I would like to tackle in late March.

However, start looking around page 67 (starts around page 59) of the following, and I think you will perhaps have some answers:

http://www.scottishpower.com/uploads/SchemeDocument26February2007.pdf

FE

[Gretel]

Thanks to both of you. I will start reading the link right now. Client is very upset with me that I even dared asking for the papers. We probably will pick up his papers today. I still kind of want to know for my own sake so I will start reading right now.

[Gretel]

following up

The link gave me the info I needed. Weird treatment though. Thank you so much again. Client calmed down, we had a good talk and I will finish his tax return.