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Gabrielle wrote in part:


Reuters is doing a huge cash-back thing with their shareholders of record 2/18. This payment will be considered (for holders of the ADS) to be dividend income from foreign sources.

The official line is: "American Depository Share (ADS) holders will receive 13 new ADSs plus the US dollar equivalent of £81.60 in cash in return for every 15 ADSs held."


While I would be interested what Roy has to say about your question, I have the following thought:

You will have to recalculate your per share basis.

If RTRSY truly represents the £81.60 to be "dividend income" (and I would expect that they would know) then such income would be governed by Section 301(c)(1) of the Internal Revenue Code and all of it would be includable in income at ordinary gain rates. You would have to recalculate the per share cost basis of your RTRSY stock by spreading the US$50 cost basis over 130 shares instead of over the 150 shares.
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