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Posted by rsmcclain on April 9, 2007, 2:51 am
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> joetaxpayer wrote:
>> U & J Taras wrote:
>>> I bought a stock of a company that merged with another (I
>>> have not sold it yet) and my 1099B is showing the sale of
>>> company A and proceeds of $0.02 and in another position
>>> "cash in lieu" $30.00. How do I report that on Schedule D?
>>>
>>> I transferred all the data from my broker to Microsoft Money
>>> and imported it to the TaxCut and the transaction is not
>>> showing the "cash in lieu" position. I really have no idea
>>> what to do with the $30.00.
>> You did not state the stock so I'll give a made up example;
>>
>> You owned 100 shares of XYZ, basis $10/share.
>> The merger deal was 10 shares of ABC for each 9 shares of
>> XYZ, so for 99 shares, you got 110 shares of ABC, plus $30
>> cash in lieu for that odd share. Your basis was $10 and it
>> was 'sold' for $30. This pretty well describes what I just
>> found at:http://www.fairmark.com/capgain/mergers.htm
>> a web sight I have no relationship with, nor any financial
>> interest in. I just googled "cash in lieu" and this was the
>> first hit.
> And I also have no relationship with that web site,
> ALTHOUGH I do know the owner of it.
>
> just today I had this case where shares were exchanged and
> cash in lieu of a partial share was paid to my client. The
> 22$ is a short term gain with bought and sold date the same
> and zero as cost basis.
I agree with Harlan. Cash was received in lieu of a partial
share of stock. Zero cost basis - short term sale.
CPA in Indy
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