Short term or long term?

Dec 28, 2007 2 Replies

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.



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? Do I use the acquired date of the Lucent stock even though the stock that I sold didn't even exist until 2/6/07 ?


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.


"Ernie Klein" wrote

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.

The IRS does not get your purchase date information, so enter the date you bought the original shares.

Yup.

The stock you sold is an extension of the stock you bought back in.....2006.

The same type of rules apply,

That's what I thought, Paul. Thanks for confirming it.

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