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Author: intercst Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 27  
Subject: Re: Cost basis question Date: 4/11/2007 8:15 PM
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ryesgramdi asks,

I bought CD at 20.50 a share. I recieved 1 for 4 of CD in H. I owned 200 shares of CD long term so I recieved 50 shares of H. I multiply 50 times 20.50 and get 1025. as my cost basis plus .25 of 7 cost of trade. When I went to the website recommended here, it was to me very complicated. Is there anything wrong with the way I am figuring this out for my taxes? I received 1500 today in my scottrade account so I guess I made a long term capital gain of 450.

Here's the relevant explanation from Cendant's web site.

Based on the closing price at which Cendant common stock, Realogy common stock and Wyndham Worldwidecommon stock traded on August 1, 2006, $2.44, $26.10 and $31.85, respectively, as reported for the New York StockExchange transactions, 16% of your pre-distribution tax basis should be allocated to your shares of Cendant commonstock; 42.5% should be allocated to your shares of Realogy common stock (including any fractional share interest); and41.5% should be allocated to your shares of Wyndham Worldwide common stock (including any fractional shareinterest)

You have $20.50 x 200 shares of the old Cendant (CD) with a cost basis of $4,100.

Realogy (H) is 42.5% of the $4,100 = $1,742.50 or $34.80 for each of your 50 shares

Wyndham (WYN) is 41.5% of the $4,100 = $1,701.50 $42.54 for each of the 40 shares.

Cendant (now named Avis/Budget with a ticker of CAR) is 16% of the $4,100 = $656 or $32.80 for each of the 20 shares of CAR.

Note that CAR had a 10 for 1 reverse split on 09/06/2006. That why you no longer have 200 shares of CAR (formerly CD).

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