[[1. I own a stock, V (paid $1000 for 100 shares or $10/share), for >18 months and it merges with another company to form company W (they increase my original 100 shares of V to 300 shares of W after the merger). If I sell immediately after the merger a)do I pay long or short term capital gains and b)how do I calculate my per share cost for this gain? Is it simply 1000/300 or 30/share? 2. I also own stock, Y (paid $4000 for 100 shares or $40/share), for > 18 months and it spins-off Company Z. Because I own 100 shares of Y, I am given 25 shares of Z. If I want to sell Z, a)how do I calculate my per share price and b) would it be considered a short or long term capital gain? Is my long term cost basis for Y unchanged or does the spin-off correct for the loss of Z? I know this is confusing and I am not sure if I have supplied all the necessary info but I would appreciate anyone's advice and/or direction to my questions.]]Only the COMPANIES involved can provide you with the specific formula required to spread your basis in the old shares over the new shares and spin off shares. They should have already been in contact with you on this issue (i.e., forwarded the formulas to your for your use). But if this information has not made it to you, you'll have to contact either your broker of the companies involved. TMF TaxesRoy
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