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Posted by slb on December 15, 2007, 6:34 pm
Please log in for more thread options Is your broker saying the "deemed disposition" applies to all shares you held or
just those that were sold?
I still think my only cap gain is on the 45.06 shares plus the fractional I was
"forced" to sell as a result of the merger. I recorded both as sales to reflect
the gain and update my account cash balance..
I assume the 104 shares were "exchanged" at the same value (like a company name
change?). I did a remove and add shares valued at the same $109.+/share. I then
updated the price as of November 30 to 137.29/share.
I may not be footnoting my financial reports but I added plenty of memos to the
transactions in case I later discover that this was incorrect.
sb
sharx35 wrote:
> > Glad you brought this up.
> >
> > I'm in the same boat. Bought 150 shares of TransOcean in 2002 at
> > $34.408/share.
> > 104.94 of those shares became 104 shares of "new" TransOcean. 45.06
> > shares were
> > bought back at $109.9533955/share. Also received $125.96 cash in lieu for
> > fractional share.
> >
> > I've tried a couple of scenarios, haven't been happy with any results.
> > I'm pretty sure I "sold" the 45.06 shares for $109.+/share. Other than
> > that I'm
> > having trouble reconciling various sell/buy, remove/add, and merger
> > transactions.
> >
> > Left a call for my broker today to get me the cost basis for the new
> > shares and
> > sort out gains. Looks like my cap gain is probably 45.06 x $109.... or
> > $4,954.50
> > + 125.96 for cash in lieu.
> >
> > I've never seen a "merger" quite like this one. Any finance/tax gurus want
> > to
> > jump in on this one?
> >
> > sb
>
> Well, here in Canada, my broker said that the share reduction amounted to a
> "deemed disposition" of those shares, for income tax purposes. That recent
> bulletin on the TransOcean website suggested that cost basis had to
> allocated to the "redeemed shares" pro rata, in calculating cap g/l.
> Technically easy. The problem is HOW to get Quicken to represent it all
> properly. Or, with this be yet another example where I have to manually
> footnote my financial reports?
>
> >
> > sharx35 wrote:
> >
> >> Are there any TransOcean shareholders here who have ***correctly***
> >> entered
> >> the transactions relating to the reclassification of TransOcean's shares
> >> that occured about Nov. 28? (Every TransOcean shareholder received .6996
> >> shares of the "new" TransOcean in exchange for 1 of the "old" TransOcean
> >> shares. They also received $33.03 for each of their old shares. If the
> >> calculation resulted in them being entitled to a fractional share, they
> >> were
> >> paid out for that fractional share on about Dec. 11. This whole thing
> >> related to a takeover/merger with GlobalSanteFe. The key here is to end
> >> up
> >> with the PROPER adjusted cost basis for the NEW shares and the proper
> >> realized capital gain/loss. According to a recent news release from
> >> TransOcean, cost basis must be allocated to the "removed" shares on a
> >> proportional basis. The various statements from my broker, both in
> >> writing
> >> and on-line, indicate that the new cost base for the reclassified shares,
> >> at
> >> least in my brokerage account may be borked. I'd be interested in hearing
> >> from someone who has solved all aspects of this problem involving posting
> >> all this in Quicken: the reduction in the number of shares and the
> >> proper
> >> calculation of the cost basis of the new shares.
> >
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