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Greetings - Can anyone advise me on the tax consequences of the Guidant merger. My situation involves the holding of LLY through the spinoff of Guidant and through the merger with BSX. My understanding is that my basis in GDT = the proportional reduction in LLY basis. Then the BSX merger gave me cash, interest and shares of BSX. Here's where I get a little uncertain. I think that the entire basis in GDT can be used to offset some of the capital gains. I have also sold every loser in my portfolio and will further reduce cap gains dollar for dollar with long and short term cap loss and the remaining cap gains are taxed at long term rate. The penalty cash portion is taxed as interest at my personal rate.
The stock portion of the deal remains untaxed until I sell - and when I do, the BSX basis is the share price on the date of the merger,$22 something per share.
Is this the correct way of dealing with the taxes or are their errors in my understanding.
I hope some tax savvy fool out there can verify or correct me.
Thanks in advance!!!

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