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Author: Jgreen72 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121482  
Subject: "Cash In Lieu" listed on form 1099 Date: 2/3/2000 1:20 PM
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I recieved my brokers 1099 stock transaction form and one of the listed items reads:

"GAP INC 24.25 CASH IN LIEU"

I assume this is a "excess" half a share that I recieved in a split. My question is do I list this on SCH D along with my other transactions or do I listed it somewhere else on my return? If I don't list it on Schedule D won't that cause a discrepency on the "Stock Total Proceeds" on my tax return and the information that the IRS recieved from my broker?

Thanks in advance for your input.

Regards,

JGreen
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Author: Taxslave One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26999 of 121482
Subject: Re: "Cash In Lieu" listed on form 1099 Date: 2/3/2000 2:46 PM
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You should include the payment on your schedule D. Your description should be Gap, Inc. - Cash received in lieu of stock. Your basis will be 0. Your holding period will be the same as the shares the stock the payment is related to.

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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 27158 of 121482
Subject: Re: "Cash In Lieu" listed on form 1099 Date: 2/4/2000 1:05 PM
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<<You should include the payment on your schedule D. Your description should be Gap, Inc. - Cash received in lieu of stock. Your basis will be 0. Your holding period will be the same as the shares the stock the payment is related to.>>

Well...I suppose that you CAN do it this way. But it's completely incorrect.

If you would like to know how it really should be reported, check out my article on stock splits and spin offs in the Taxes fAQ area.

TMF Taxes
Roy

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Author: naaree One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 27194 of 121482
Subject: Re: "Cash In Lieu" listed on form 1099 Date: 2/4/2000 3:33 PM
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Roy,

I read thru the FAQ regarding the Cash in lieu situation.

In my situation, Ameritrade classified it under 1099-DIV instead of 1099-B?

I had 13 shares of T
Split 3 for 2
Now I have 19 shares.

Do I just report it under Dividends?

Naaree

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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 27375 of 121482
Subject: Re: "Cash In Lieu" listed on form 1099 Date: 2/5/2000 7:57 PM
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<<I read thru the FAQ regarding the Cash in lieu situation.>>

Great...then you should have found that you actually SOLD 1/2 share, and you'll want to allocate your basis of the original shares over that 1/2 share and report the gain/loss on Schedule D. You'll have to use the information provided by the company in order to correctly compute your basis.

<<In my situation, Ameritrade classified it under 1099-DIV instead of 1099-B?>>

Doesn't make any sense to me...but I can't see any of the documents.

<<I had 13 shares of T
Split 3 for 2
Now I have 19 shares.>>

But you originally had 19 1/2 shares...and the company purchase those 1/2 shares from you. So this transaction should have been reported on Form 1099B...directly from the company. At least if my math is correct.

<<Do I just report it under Dividends?>>

Do what you want...but I still don't think it's correct based upon what you are telling me.

TMF Taxes
Roy



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Author: naaree One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 27451 of 121482
Subject: Re: "Cash In Lieu" listed on form 1099 Date: 2/6/2000 12:16 PM
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<<In my situation, Ameritrade classified it under 1099-DIV instead of 1099-B?>>

Doesn't make any sense to me...but I can't see any of the documents.


I totally agree with you. But it is a fact. Dont know why Ameritrade is handling it this way. Curious to know how the other brokerages handle this transaction.


<<I had 13 shares of T
Split 3 for 2
Now I have 19 shares.>>

But you originally had 19 1/2 shares...and the company purchase those 1/2 shares from you. So this transaction should have been reported on Form 1099B...directly from the company. At least if my math is correct.


Couldn't agree with you more. But since they havent, would greatly appreciate your advice on how I should show this transaction in my 1040.

Thanks
Naaree

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Author: kchandlersmith Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 27464 of 121482
Subject: Re: "Cash In Lieu" listed on form 1099 Date: 2/6/2000 1:15 PM
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My cash in lieu is listed on my e-trade 1099-B. I just put it as a short term cap gain on my return (I hope this is right), as I figure it was a one day gain of $$ that went into my cash account on the day the two company's merged and the stock trade occurred.

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Author: esolson Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 27474 of 121482
Subject: Re: "Cash In Lieu" listed on form 1099 Date: 2/6/2000 3:15 PM
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I also was going to put my "cash in lieu" on my schedule D short-term gains, however, are the costs for this $0 then? And then also, what do you put as the acquistion date?
- Young and confused in Chicago.

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Author: kchandlersmith Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 27480 of 121482
Subject: Re: "Cash In Lieu" listed on form 1099 Date: 2/6/2000 4:04 PM
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That's exactly what I did. I listed the cost/basis as $0 and the date of acquisition and sale as the same day. Like I said in my original post, I'm not sure if this is correct, but intrinsically it seems like it's right.

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Author: RooCat Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 27554 of 121482
Subject: Re: "Cash In Lieu" listed on form 1099 Date: 2/6/2000 8:25 PM
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The date of acquisition would be the date you originally purchased the preconversion stock. You would divide the original basis by the total number of converted shares including the fractional shares. This would give you the basis per share in the converted stock. The sales date would be the conversion date.

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Author: kchandlersmith Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 27570 of 121482
Subject: Re: "Cash In Lieu" listed on form 1099 Date: 2/6/2000 10:39 PM
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I agree that your formula will give the basis for the converted shares. I'm referring to the situation where for example, the converting company does not give fractional shares in the new stock, but instead just gives the leftover amounts in cash, thus, "cash in lieu." This was listed on my 1099-B and I treated it as a short term gain on the day of conversion.

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Author: RooCat Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 27581 of 121482
Subject: Re: "Cash In Lieu" listed on form 1099 Date: 2/7/2000 12:22 AM
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the converting company does not give fractional shares in the new stock, but instead just gives the leftover amounts in cash, thus, "cash in lieu." This was listed on my 1099-B and I treated it as a short term gain on the day of conversion.

That fractional share HAS a basis and is construed as being held as long as the originally purchased stock. Say you had 90 shares and the conversion was 1.65 to 1. You would end up with 148.5 shares. You would be given cash for the fractional .5 share. If you originally paid $9000 for the 90 shares, then your basis in the converted shares is $9000 divided by 148.5 shares or $60.60606 per share. The fractioanl share has a basis of $30.30303. This is the basis you report on schedule D for the fractional share. The cash in lieu is the sales price. It may or may not be short term DEPENDING on when you bought the ORIGINAL stock.

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Author: kchandlersmith Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 27746 of 121482
Subject: Re: "Cash In Lieu" listed on form 1099 Date: 2/7/2000 11:12 PM
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That fractional share HAS a basis and is construed as being held as long as the originally purchased stock. Say you had 90 shares and the conversion was 1.65 to 1. You would end up with 148.5 shares. You would be given cash for the fractional .5 share. If you originally paid $9000 for the 90 shares, then your basis in the converted shares is $9000 divided by 148.5 shares or $60.60606 per share. The fractioanl share has a basis of $30.30303. This is the basis you report on schedule D for the fractional share. The cash in lieu is the sales price. It may or may not be short term DEPENDING on when you bought the ORIGINAL stock.

Well, you finally made it through my thick skull. Thanks for taking the time.

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