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Author: Bob78164 Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121341  
Subject: Re: 1099-B Date: 2/21/2002 3:58 PM
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ckbosworth writes:

I have owned texaco since for 28 years (10 shares gifted at birth) As a result of their resent merger with Chevron, i recieved .77 shares of the new corporation for each share of Texaco i held. Partial shares were not distributed with the merger, as a result, i got about 60 bucks back in November for the partial shares left over from the merger. I received a 1099-B for this money. Where to i report this money on my taxes. Is this taxed as income from dividends or as a capital gain on the sale of shares. If the latter is true, how to i calculate the cost basis?

I reply:

To make sure I understand what you're saying, you now own 7 shares of the new corporation, and .9091 (= 0.7/0.77) shares of your Chevron were sold. This is capital gain or loss (I imagine a gain), taxed at 8% or 20%, depending on your tax bracket. Since the shares were a gift, your basis is the basis of your donor. --Bob
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