The Motley Fool Discussion Boards

Previous Page

Financial Planning / Tax Strategies


Subject:  Citigroup preferred payment Date:  4/7/2011  9:59 PM
Author:  Crosenfield Number:  113022 of 127639

For several years I have owned some shares of a preferred stock issued by Citigroup.

The preferred was issued with restrictions as to what money Citi might use to redeem the shares should it wish to do so in the future.

Recently I received information that Citi would pay shareholders for permission to remove that restriction. Today I got the payment.

It isn't interest or a dividend; they didn't redeem any shares, alhough with the restriction removed I suspect a tender offer for the shares will follow shortly.

I would assume the payment would be taxable, but what would it be called? Can I subtract it from my basis, effectively making it a capital gain? It was something like an option premium...


Copyright 1996-2018 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us