Tim Hortons / Burger King merger

Hi, Art.

You probably will need to wait a few days - or weeks - for an official explanation of the details of the merger transaction. The best place to look might be on the Investor Relations page of the former Burger King website:

5734&storyIdr258583 Are you a citizen/resident of Canada? Or of the USA? It probably makes a LOT of difference and you didn't mention it.

I'm not familiar with this merger, but from information on the web, this seems to be somewhat more complex that a typical merger. A new corporation, Restaurant Brands International Inc. (TSX, NYSE: QSR), was created and both BKW and THI became subsidiaries on the new corporation. The news release does not say whether the transaction is taxable to either US or Canadian taxpayers.

The press release does say:

I suggest that you "stand by" and wait for advice from the lawyers and accountants who are being paid large fees to explain all this to shareholders. (I know it's frustrating; I have shares in Kimberly Clark, which recently spun off Halyard Holdings, Inc., and I'm still waiting for definitive information to file my US tax return. And Quicken 2015 does NOT make it easy to record this transaction.)

RC

-- -- R. C. White, CPA San Marcos, TX (Retired. No longer licensed to practice public accounting.) snipped-for-privacy@grandecom.net Microsoft Windows MVP (2002-2010) (Using Quicken Deluxe 2015 R3 and Windows Live Mail in Win8.1 x64)

Before the merger, I owned Tim Hortons stock. For each share I owned I got approx. $55.83 in cash and approx. 0.82 shares of Restaurant Brands International stock and cash in lieu of fractional shares. According to the literature I received, my capital gains will be the lesser of either 1) (Cash received + fair market value of shares received) minus my cost basis or 2) Cash received. In my case the total cash received is less. So, I figure all the cash needs to be taxed as gains and my cost basis for my Hortons stock will be my cost basis for the new stock.

What would the transactions be for entering this into Quicken?

I'm a U.S. Citizen. Before the merger took place, I got very large book explaining the merger.

There was Q&A in the book.

Q: What are the U.S. federal income tax consequences of the transactions to holders of Tim Hortons common shares?

A. (clip from the answer that relates to my situation)

In the case of a U.S. holder of Tim Horton common shares who receives a combination of cash (including any cash received in lieu of a fractional Holdings common share) and Holdings common shares in the arrangement. (A) if the sum of such cash (including any cash received in lieu of a fractional Holdings common share) and the fair market value of such Holdings common shares is greater than such U.S. holder's adjusted tax basis in the Tim Hortons common shares exchanged, then such U.S. holder should recognize gain equal to the lesser of (i) the amount by which the sum of such cash and fair market value of such Holdings common shares exceeds such U.S. holder's adjusted tax basis in such U.S. holder's Tim Hortons common shares; and (ii) the cash received by such U.S. holder in the arrangement

Since (A) was true and (ii) was the lesser. This is what I was going on at least unless I find out differently. If this is the case I just not sure how to enter it into Q.

As you stated R.C., I usually find a document on their website how to distribute cost basis.