George Anthony <mrblandings[at]atlanticbb.net> wrote:
- quote -

No.

Each share of XXX cost something. For it, he gets 1.098 shares of YYY
and $3.023. Allocate the cost of the XXX proportionately to the YYY
and $3.023. The excess of $3.023 over its share of the cost of XXX is
long-term capital gain. The remainder of the cost of XXX is the basis
for YYY.

Seth

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Due to a merger which qualifies as a reorganization, the
taxpayer received 1.098 shares of YYY stock and a cash
payment of $3.023 for each share of XXX stock he held.
These shares were purchased in the 80's. The cash payment
exceed $19,000 and he received certificates for the YYY
stock.

Will the cash payment be treated as a long term capital
gain? Will the basis of the new stock be the basis of the
old stock?

Thank you in advance

George L Anthony
geoanthony[at]atlanticbb.net

<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >