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Financial Planning / Tax Strategies


Subject:  Re: How is cash received in a merger treated Date:  5/7/2019  1:48 AM
Author:  aj485 Number:  129237 of 129771

How would the cash received in this merger be treated for tax purposes?

It will depend on specifically how the deal is structured, so you will need to wait for the terms to be provided to you.

Is the cash received regarded as a return of capital reducing the cost basis of the Occidental shares that I receive with capital gains/losses being determined when I eventually sell the Occidental shares?

Possibly. Or it could be that the cash received is due to selling part of your stock, and the basis will need to be allocated between the cash and the shares that you receive. Again, it depends on the structure of the deal whether to cash received is considered return of capital or a sale.

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