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Financial Planning / Tax Strategies


Subject:  Holding period Date:  1/15/1999  5:07 PM
Author:  HarpFool Number:  8444 of 127751

The tax Q&A article today touched an important question for me. What's your holding period if a stock you own gets swapped in a stock for stock merger, e.g. Amoco & BP? I gather it's the date you bought your Amoco stock.

Given that, what do you do if you bought stock on several occasions and it gets converted to fractional shares of the new stock? Say you bought 30 shares of AN a year ago and another 35 six months ago. This translates into about 43 shares of BPA. Do you say "I effectively bought 19 shares (really 19.85) of BPA over a year ago and another 24 (really 23.15) six months ago" for IRS purposes?

Seems like this makes it a bit more annoying to keep track of dividend reinvestment.

-- Tim

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