- quote -

Somewhere in the series of transactions, I received 250 shares of UBS
AG New for my 250 shares of UBS. Then I received 12 more shares of
UBS AG New. Thank you very much for taking the time to respond. I
will review what you wrote and see if I can figure it out.

Edward

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On Mar 26, 6:51 pm, Edward <edward...[at]gmail.com> wrote:

- quote -

You said "On May 19, 2008, UBS issued 12 shares of UBS AG New leaving
me with 262 shares UBS AG New", so where did the other 250 shares of
UBS AG New come from?

This looks like a spinoff problem. There might be many formula to
deal with this, but here is one:

Suppose 5 shares of A spin off into A and B. Every 2 shares of A
gives you 1 share of B. The price of A and B right after the spinoff
are $10 and $30, and your original cost basis in A was $50.

After the spinoff, your net cost basis in both companies must be $50.
After the spinoff you have 2.5 shares of B. So the net value after
the spinoff (NOTyour net cost basis) is $10*5+$30*2.5=$125. The
allocation to A is the net value in A after the spinoff divided by the
total net value, or $50/$125 = 40%. The original cost basis of A is
thus 40% of $50 = $20. The allocation to B is the remainder of 60%,
or by the formula: net value in B after the spinoff divided by the
total net value, or $75/$125 = 60%. So the cost basis of B is $30.
However, you did get 2.5 shares of B. You should have a 1099-B for
half a share, or $30*0.5=$15. The cost basis of this half a share is
0.5/2.5*$30 = $6. The cost basis of your remaining B is $30 - $6 =
$24.

It looks like the "250 AG Ord. F entitlement shares" were given to you
then taken away, so maybe you can ignore them.

You got a spinoff1 of either "12 UBS AG New" or "262 UBS AG New". So
try to apply the above formula to find your original cost basis in UBS
and UBS AG New.

You later had a spinoff2 of "262 shares UBS AG New 08 RTSF exp.
6/12/08". So apply the above formula to find your original cost basis
in UBS and UBS AG New 08 RTSF exp. 6/12/08.

It looks like UBS AG New 08 RTSF exp. 6/12/08 might be a bond that
matures. I suppose that if you did not make an election amortize
taxable bonds, then you just treat your bonds and stocks and use the
above formula to find the original cost basis. Any interest the bond
paid should typically be reported on 1099-INT and put into Schedule B
of your tax return. Furthermore, it looks like in spinoff2, you got
one share of B for every one share of A, so you don't have to worry
about fractional proceeds and cost basis.

Be aware that by my formula, your cost basis in your original shares
of 250 UBS is reduced.

Hope I'm not way off base here.

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

I am really confused about this.
I have owned 250 shares of UBS since 2006.
On May 1, 2008, UBS issued 250 AG Ord. F entitlement shares.
On May 19, 2008, UBS issued 12 shares of UBS AG New leaving me with
262 shares UBS AG New, and took back the 250 shares AG Ord. F
entitlement.
On May 23, 2008, UBS issued 262 shares UBS AG New 08 RTSF exp.
6/12/08.
I still have 262 shares UBS AG New.
My broker's statement shows I sold 262 shares of UBS AG New RTSF for a
gross amount of $333.12.

I am trying to figure out the basis for the $333.12. I read some
information on UBS's website,
but I cannot figure it out. Can anyone help? Thank you VERY much in
advance.

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