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Subject Author Date
Cash in lieu of stock basis? Phil 04-05-2008
Posted by Phil on April 5, 2008, 12:01 pm
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 1. On 08/11/2006 purchased 100 sh of FRO for $4,348.95 ($43.44 per sh)
2. On 03/22/2007 received 10 sh of SFL as dividend from FRO
3. On 03/22/2007 received $19.34 cash in lieu of .71430 sh of SFL
4. On 03/22/2007 received regular $205 qualified cash dividend from FRO
5. On 03/22/2007 price of FRO was $34.83
6. On 03/22/2007 price of SFL was $27.25
7. $19.34 cash in lieu of .71430 sh of SFL was reported on a 1099-B

What is my basis for this? or do I show this as purchased on 03/22/2007
for $0 and sold on 03/22/2007 for $19.34 as short term cap Gain?

Phil

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Posted by joetaxpayer on April 5, 2008, 12:30 pm
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Phil wrote:
> 1. On 08/11/2006 purchased 100 sh of FRO for $4,348.95 ($43.44 per sh)
> 2. On 03/22/2007 received 10 sh of SFL as dividend from FRO
> 3. On 03/22/2007 received $19.34 cash in lieu of .71430 sh of SFL
> 4. On 03/22/2007 received regular $205 qualified cash dividend from FRO
> 5. On 03/22/2007 price of FRO was $34.83
> 6. On 03/22/2007 price of SFL was $27.25
> 7. $19.34 cash in lieu of .71430 sh of SFL was reported on a 1099-B
>
> What is my basis for this? or do I show this as purchased on 03/22/2007
> for $0 and sold on 03/22/2007 for $19.34 as short term cap Gain?
>
> Phil
>

You mean March 06, right?
Why not go to their web site?
http://www.frontline.bm/IR/tax_treatment.shtml
will lead you to the document
http://www.frontline.bm/pdf/060320%20SFL%20spinoff%20of%20shares.pdf

Please keep in mind, even with the details you provided above, the exact
tax consequences are always spelled out by a document issued by the
company. Pardon if I am mistaken, but you say you bought FRO in Aug 06,
their site says they spun out SFL in March 06. So either your dates are
typos, or they have had multiple spinoffs off this other stock?

Joe
www.blog.joetaxpayer.com

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

Posted by Phil on April 5, 2008, 2:44 pm
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joetaxpayer wrote:
>
>
> Phil wrote:
>> 1. On 08/11/2006 purchased 100 sh of FRO for $4,348.95 ($43.44 per sh)
>> 2. On 03/22/2007 received 10 sh of SFL as dividend from FRO
>> 3. On 03/22/2007 received $19.34 cash in lieu of .71430 sh of SFL
>> 4. On 03/22/2007 received regular $205 qualified cash dividend from FRO
>> 5. On 03/22/2007 price of FRO was $34.83
>> 6. On 03/22/2007 price of SFL was $27.25
>> 7. $19.34 cash in lieu of .71430 sh of SFL was reported on a 1099-B
>>
>> What is my basis for this? or do I show this as purchased on
>> 03/22/2007 for $0 and sold on 03/22/2007 for $19.34 as short term cap
>> Gain?
>>
>> Phil
>>
>
> You mean March 06, right?
> Why not go to their web site?
> http://www.frontline.bm/IR/tax_treatment.shtml
> will lead you to the document
> http://www.frontline.bm/pdf/060320%20SFL%20spinoff%20of%20shares.pdf
>
> Please keep in mind, even with the details you provided above, the exact
> tax consequences are always spelled out by a document issued by the
> company. Pardon if I am mistaken, but you say you bought FRO in Aug 06,
> their site says they spun out SFL in March 06. So either your dates are
> typos, or they have had multiple spinoffs off this other stock?
>
> Joe
> www.blog.joetaxpayer.com
>
No its 03/2007 and their web site has nothing about 2007tax treatment.
Phil

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

Posted by DF2 on April 5, 2008, 4:05 pm
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In misc.taxes.moderated, Phil wrote:

>joetaxpayer wrote:
>>
>>
>> Phil wrote:
>>> 1. On 08/11/2006 purchased 100 sh of FRO for $4,348.95 ($43.44 per sh)
>>> 2. On 03/22/2007 received 10 sh of SFL as dividend from FRO
>>> 3. On 03/22/2007 received $19.34 cash in lieu of .71430 sh of SFL
>>> 4. On 03/22/2007 received regular $205 qualified cash dividend from FRO
>>> 5. On 03/22/2007 price of FRO was $34.83
>>> 6. On 03/22/2007 price of SFL was $27.25
>>> 7. $19.34 cash in lieu of .71430 sh of SFL was reported on a 1099-B
>>>
>>> What is my basis for this? or do I show this as purchased on
>>> 03/22/2007 for $0 and sold on 03/22/2007 for $19.34 as short term cap
>>> Gain?
>>>
>>> Phil
>>>
>>
>> You mean March 06, right?
>> Why not go to their web site?
>> http://www.frontline.bm/IR/tax_treatment.shtml
>> will lead you to the document
>> http://www.frontline.bm/pdf/060320%20SFL%20spinoff%20of%20shares.pdf
>>
>> Please keep in mind, even with the details you provided above, the exact
>> tax consequences are always spelled out by a document issued by the
>> company. Pardon if I am mistaken, but you say you bought FRO in Aug 06,
>> their site says they spun out SFL in March 06. So either your dates are
>> typos, or they have had multiple spinoffs off this other stock?
>>
>> Joe
>> www.blog.joetaxpayer.com
>>
>No its 03/2007 and their web site has nothing about 2007tax treatment.
>Phil

I think the 3/2007 spinout from the ADR is the "Q4" 3 SFL shares for
each 28 FRO shares of "Q4 2006" from chart on
http://www.frontline.bm/IR/spinoff.shtml

I would allocate basis from FRO to the new SFL shares based on the 6
March 2007 ex-dividend date FRO vs SFL prices. The allocating in
proportion to the opening prices or average of highs and lows would
each be acceptable.

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

Posted by DF2 on April 5, 2008, 5:47 pm
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In misc.taxes.moderated, DF2 wrote:

>
>I think the 3/2007 spinout from the ADR is the "Q4" 3 SFL shares for
>each 28 FRO shares of "Q4 2006" from chart on
>http://www.frontline.bm/IR/spinoff.shtml
>
>I would allocate basis from FRO to the new SFL shares based on the 6
>March 2007 ex-dividend date FRO vs SFL prices. The allocating in
>proportion to the opening prices or average of highs and lows would
>each be acceptable.

One more thing: the footnote to that table says "Cost allocation in
US is set basis the share price on distribution date". Despite that,
in my non-expert opinion, the prices on the ex-dividend date would
probably be the better ones to use. I would welcome other opinions.

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

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