How do I handle a merger for cash and stock.
Details: I hold 1000 shares of Company Alpha valued at $5000.00. Company Beta took over company Alpha as follows:
600 shares were exchanged for Company Beta at the rate of 3 for 1. Therefore I received 200 shares of Company Beta stock. Also, Company Beta purchased the remaining 400 shares of Company Alpha for $250.00Tax Law: I know that since I had no choice in the merger and had to accept the stock and cash, that the cash is fully taxable and the value of the Company Beta new shares is the same total value as Company Alpha shares ($5000.00).
I entered the transaction in Quicken as a stock for stock exchange, showing the 1000 Shares of Company Alpha, valued at $5000.00, being exchanged for 200 shares of Company Beta, valued at the same $5000.00
QUESTION: How do I enter the cash I received for the remaining 400 shares of Company A of $250.00 as a capital gain with a zero basis for the shares sold to Company Beta? I can transfer the cash in but then the Capital Gains transaction will not reflect the cash part of the transaction.
I hope I did not make this too complicated.
--------------------------------------------- Bob
Reply To: TheLoneRanger at verizon dot net