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<< My wife had some shares of stock in a company that she used to work for. She accumulated the stock over a number of years through weekly payroll deductions. The company recently merged with another. The shares were converted to cash by the aquiring company which made the conversion immediately subject to long term gains taxes. How does one figure the basis in such a case? >>

Add up her investments. If there was any part of the purchases "deemed" to be wages and included on her W-2's (this should show on her statements), that's part of her basis too.

Phil Marti
Tax Preparer
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