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<<What does one do when stock they own in Company A is bought by Company B and then converted to Company B shares?

Which price do I use for the original cost basis? The price when I received Company B's shares, or the price I originally paid for Company A and then multiplied by the share conversion ratio?>>

As Peter pointed out, there us usually a very specific formula that Company B will provide to you that will allow you convert your basis in Company shares to Company B shares.

For additional information on how this all works, see may multi-part article in the Taxes FAQ area regarding stock split ups and spin offs.

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