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The merger/exchange with International Paper was a taxable transaction. That means that you realized gain on the difference between the sum of the fair market value of the IP stock plus the cash received and the original cost basis of your Champion stock. Your cost basis for the International Paper stock will be the fair market value used in the above calculation.

Evidently, you could have received the IP stock either in an exchange offer or a merger, and the fair market value will differ according to which way you received the stock. To learn more about that you can go to

Good luck!

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