Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
In 1992, I bought 500 shares of company E for $11,500. In 2012, company M bought company E for $7,000 cash and 200 shares of E's stock worth $6,000 at time of issuance plus 300 warrants to buy E's stock for $40 any time until 2017. Stock was trading at $30 per share at time of issuance. Warrants did not start trading until issuance. I received a 1099B for the $7,000 cash but no other information was sent to IRS.

Two questions:
1. What gain if any should I report this year.
2. What is my basis in Company M's 200 shares.

The warrants probably have no basis. They are currently trading for $6. If I were to sell them, all the proceeds would be gain, I assume.

Any help would be appreciated.
Print the post  

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.
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 Glassdoor #1 Company to Work For 2015! 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