Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (4) | Ignore Thread Prev | Next
Author: donk23 Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121061  
Subject: Re: Stocks question Date: 2/23/2001 11:11 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
. I own stock in a company which recently spinned off one of its businesses. I got a number of shares of the new company for each 10 shares of the old company. The broker sent me a form 1099-B, showing $5.18 as gross proceeds. He explains that instead of giving me fractional shares, the company decided to give me cash. My question is: how is this amount to be declared to the IRS? Short term capital gains? Dividend? Does anyone know? I realize it's a minor amount, but I want to report it correctly.

You should have received instructions from the original company giving guidance (from their attorneys) as to the tax treatment of the transaction (the spin-off). If you don't have these, contact the company or check their website.

Typically, cash in lieu of fractional shares is treated as if you sold the fractional share. The basis in the new shares will be some portion (see the company's advice mentioned above) of the basis in the original stock. The "purchase date" generally is inherited from the original stock.
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (4) | Ignore Thread Prev | Next

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
Post of the Day:
Value Hounds

Medallion Financial: TAXI!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement