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I exchanged shares of stock for new stock based on the merger of the companies. The merger qualified as a tax-free reorganization. As part of the merger, I received cash for the partial share which would be recognized as a long term gain. How do I fill at Schedule D to show this merger transaction?

Your acquisition date is the same as that of the old stock. To find your basis in the fractional share, divide your basis by the number of shares, including the fraction, that you received. This gives you a per-share basis in the new stock. Multiply by the number of whole shares you received. This gives you the basis in the shares you now own. The difference is the basis of the fractional share.

Phil Marti
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