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Financial Planning / Tax Strategies
|Subject: Re: Basis question||Date: 8/9/2012 6:15 PM|
|Author: fleg9bo||Number: 116524 of 120453|
Then there's the matter of the cash-in-lieu payments.
Yeah - about those. You did that wrong back in 2006. You should have first done the basis allocation from above. That would give you your basis in the 108-plus-a-fraction shares in each company. The cash in lieu is a sale of the fractional share. So you'd then need to allocate your total cost in the newly spun off companies to that fraction of a share that was sold. Of course, that leave you with a very slightly smaller basis in the whole shares.
Gotcha. What I actually did was put the cash-in-lieux (cashes-in-lieu?) on my 2006 Schedule D with a $0 basis. The two items totalled $34 out of six figures worth of cap gains, so I didn't care if I paid a few pennies more in tax if it saved me some work. And I don't care too much if I can't recapture those few pennies now by increasing my basis by $34. I'll see if I can find the basis allocation info on the companies' websites.
Thanks for the help, but I'm just getting warmed up. Next is Citigroup, which changed its name from Travelers before spitting out a handful of shares of TPCA and TPCB to which strange things happened, leaving me with shares of C alongside a few shares of a newfangled Travelers. That ought to be fun.
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