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Posted by Paul Thomas, CPA on December 28, 2007, 3:41 pm
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> On 2/6/07 Lucent (LU) merged with Alcatel to become Alcatel-Lucent
> (ALU). I received new ALU stock in exchange for my LU stock that came
> from the Lucent spinoff (10/14/06). I sold the ALU stock on 12/11/07.
>
> The "acquired" date for the ALU stock and the sold date make it seem
> like it is short term, but since I didn't actually purchase any new
> stock, it seems to me that a company merger shouldn't change my long
> term stock into short term.
It doesn't change the holding period. Mergers - as this is most likely -
have the original purchase date carry forward. The same rules apply for
spin-offs.
> If I am correct that this is really long term, then how do I show that
> on Sched D when the dates indicate short term?
The IRS does not get your purchase date information, so enter the date you
bought the original shares.
> Do I use the acquired date of the Lucent stock
Yup.
> even though the stock that I sold didn't even
> exist until 2/6/07 ?
The stock you sold is an extension of the stock you bought back in.....2006.
> BTW I have the same problem with Agere (AGR) merging with LSI Logic Corp
> (LSI) on 4/2/07. Other long time holders of AT&T stock who sold off the
> small oddball spinoffs in 2007 may have the same issues.
The same type of rules apply,
--
Paul A. Thomas, CPA
Athens, Georgia
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