Tax on sale of shares of UBS Rights

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

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.

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.

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