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Posted by Ira on July 4, 2007, 3:22 pm
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I am so pleased that you have all taken the time to respond. I still
have not yet taken action because CORPORATE ACQUSITION requires more
information (something about a per share price being offered).
However, I cannot answer your kind questions for more information. If
I had it, I certainly would have provided it.
The best I can say is that my merrill lynch statement showed up with
the following:
6/27 ESCBX EXCHANGE -38
6/27 GCVBT EXCHANGE +38
E = AXA Enterprises Small Co Value
G = Goldman Sachs Structured Small Cap Value B
It was not a sale and purchase (that would be SELL and BUY). This is
all the info I have. I am wondering if AXA was taken over by Goldman
Sachs
Thanks
wrotf:
>Hi, Ira.
>
>As JM said, we need a lot more information before we can give an intelligent
>answer.
>
>First, the Internal Revenue Code taxes gains on "sales and exchanges". In
>other words, an exchange of properties is just as taxable as a sale. Gain
>or loss is measured by subtracting your adjusted basis for the property
>traded away from the fair market value of the property received. Fair
>market value for the two properties is deemed to be equal and set at
>whichever can be more easily and accurately determined.
>
>Second, there are many exceptions to the general rule. These exceptions are
>all spelled out in code sections written by Congress to accomplish certain
>governmental goals. Many corporate transactions are very carefully
>structured by management (with advice from attorneys and CPAs) to fit within
>one of these exceptions. In order for us to know how a particular
>transaction is to be treated for tax purposes, we need to read the
>voluminous documents from corporate management to see which code section
>applies.
>
>Was your mutual fund exchange engineered by the fund managers to fit a code
>section? (This is not too unusual when managers are re-aligning funds
>within the "family".) Or was it a straightforward exchange that you
>initiated by calling your broker and saying that you think XYZ looks better
>than your ABC, so please swap them for me? (In that case, you would treat
>it as a sale of your ABC and a purchase of XYZ. All prior basis numbers and
>dates would be forgotten after the ABC sale is recorded.) Or did the
>exchange happen in some other way?
>
>If this is an management-initiated exchange, you should have received
>information about what happened "in the real world". With that, you should
>be able to figure out how to record it in Quicken - and we'll be glad to
>help. You also should discuss this with your own CPA and broker.
>
>RC
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