Message Font: Serif | Sans-Serif
No. of Recommendations: 0
My employer's stock had a spin-off in 2000. I received a number of shares of the new company as well as a check for the fractional shares.

I know I need to report this income on Schedule D.

How would I determine whether or not this is short-term or long-term?

Every merger/takeover/spinoff has its own tax treatment, which you should find in the paperwork you received. If you can't find it, probably some Fool has posted the information on the company's board. You can go there by typing its ticker in the box at the lower left. If all else fails, contact investor relations.

Can I just simplify all of this and report it as a short-term gain with a zero basis? I wouldn't think the IRS would object to this approach as I am guaranteed in this case to pay at least as much tax as I actually owe. We're only talking about $80 in net proceeds here, so it's not that big of a deal.

IRS will certainly not object if you take this approach to the cash in lieu payment. You're still going to have to do the basis allocation, though, so you might as well go ahead and do it now.

Phil Marti
Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.