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[[I had X shares of DSC communication stock, the company was bought by
Alcatel last year. So my X shares of DIGI became Y shares of ALA. There
must be fractional share, because I received amount Z dollars on 1099-B from
my broker. How should I enter it on schedule D? How do I calculate the cost
basis of the fractional share ?]]

You'll have to compute your basis in the new shares (and the fractional shares) based upon the formula provided by the company. Read my posts on this issue in the Taxes FAQ area for more details.

[[ Also my broker charged me $15 everytime there is a reorganization (eg., stock
buyout). Can I add this to the commission , or it has to be the "investment
expense" which must exceeds 2% of AGI in order for deduction?]]

I'm not familar with this charge, so I'm not really sure myself. But if it an expense to buy or sell the stock, then it must be attached to the shares. If it is some type of "administrative" fee, then it is an investment expense to be reported as a miscellaneous itemized deduction, subject to the 2% AGI limitation.

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