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Author: irasmilo Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121568  
Subject: Re: Mergers/Spin-offs on 1099-B Date: 10/14/2010 6:45 PM
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have two similar situations:

1. Vignette merged into Open Text.
- I received a payout for the number of shares I had, which showed up as a long-term gain on 1099-B.
- I received 5 shares of Open Text and the value of the stock on the day of the merger also showed up as a long-term gain on 1099-B.
- Cash in lieu for fractional shares of Open Text was listed under short-term gain on 1099-B.
- I still hold the Open Text shares.


2. Wendy's spun off Tim Horton's and then Tim Horton's had a reorganization which led to it becoming a Canadian company which became a taxable event. This shows up on 1099-B.
-I still hold both Wendys and TH shares.

How do I account for these in terms of taxes and cost basis?


Both of these are complex transactions. You need to find the relevant information in the prospectus you received before the merger or from the corporations' Investor Relations website. You will probably need to run a series of calculations to determine how much, if any, of the proceeds are taxable, how much is a return of capital, and what your cost basis is in any shares you hold after the merger/reorganization transactions.

Ira
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