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I opted for the all cash option in the MediaOne/AT&T merger. As you know we all received mixed payments--Principal, cash-in-lieu and top up. I bought the 24 shares of the stock in September of 99 for about $65/share and the merger took place in July of 2000(short term). I received 21 shares of AT&T and principal for about 10 stocks at $85/share plus top up and cash in lieu. Do I need to fill out a 6781 (Gains and Losses from Section 1256 contracts and Straddles) and if so what do I put on the lines of section B (gains from straddles) or do I just enter all the proceeds as capital gains on Schedule D. I called IRS and they just sent me to the MediaOne cost basis web site which was like reading Greek. All I want to know is how to fill in the blanks on the correct IRS forms. I'm sure I'm not the only one having problems and I was able to do the rest of my taxes without help. I don't want to have to pay someone $200+ for one form.

Thank you for your help.
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