This spreadsheet represents one interpretation of how to account for a "stock plus cash" merger.
There is no guarantee that the information or formulas are correct.
You should seek professional tax advice if you have any questions about tax regulations.
Contact email@example.com if you have questions about using this spreadsheet (last updated 08 Feb 2009).
Make entries only in cells with a light blue background. The spreadsheet is "protected" to help prevent other changes.
Sample information for the 2008 Barr Pharm. / TEVA merger is provided as an example. The share ownership
data is hypothetical. It shows multiple share purchases as might have occured from multiple investments over time.
Be sure to replace ALL the sample information (scroll down to see it all!) with actual information from your own records.
After following the above instructions, look on the "Club Accounting" sheet tab (below) to see the transactions
to be entered into the various club accounting software products.
TEVA New Stock
0.6272 New Shares Received Per Share of Old Stock
12/23/2008 Merger Date (Do not use a Jan 1st merger date with IClub accounting software!)
$42.39 Market value of TEVA as of 12-23-2008
$20.000 Corporate Reorganization Fee Charged by Broker
BRL Old Stock
$39.900 Cash Received Per Share of Old Stock Small This area ensures that the individually
Adjustments rounded LTCG, STCG, and ROC values
267.78700 BRL shares held before merger to Match Broker will add to equal Cash Received.
167.95601 TEVA shares received due to merger 0.0000 It calculates the larger value as
$10,684.70 Cash received (excluding cash in lieu of fractional shares) $0.00 Cash Received less the sum of the
$17,804.36 Total Value Received other two values (all rounded).
$6,754.43 BRL Long-Term Capital Gain Distribution 6754.425264 1 6754.43
$0.00 BRL Short-Term Capital Gain Distribution 0 3 0
$3,930.27 BRL Return of Capital Verified (equals difference between old and new Tax Basis, plus Reorg Fee). 3930.274736 2 3930.27
$11,049.93 BRL Shares Tax Basis
$7,139.66 TEVA Shares Tax Basis (all shares)
$7,099.02 TEVA Shares Tax Basis (whole shares)
---Old Shares Held--- 366 days for Long Term gain. --Received--
Long Term / BRL Capital BRL Return of Total Value TEVA Shares
Date BRL Shares Tax Basis TEVA Shares Cash Gain (Loss)
Short Term Gain Dist. Capital Received Tax Basis
6/24/2002 73.39600 $1,999.99 LT $2,879.890 $48.61 46.03397 $2,928.500 $4,879.880 $2,879.890 $1,951.380
9/14/2004 51.68800 $2,099.98 LT $1,336.600 $725.75 32.41871 $2,062.351 $3,436.580 $1,336.600 $1,374.229
3/8/2007 24.33000 $1,199.96 LT $417.669 $553.10 15.25978 $970.767 $1,617.629 $417.669 $646.862
4/26/2007 118.37300 $5,750.00 LT $2,120.266 $2,602.82 74.24355 $4,723.082 $7,870.266 $2,120.266 $3,147.184
You must first use the "Data" sheet in this file to enter the correct information for the merger transaction
as well as the correct stock ownership information for your situation.
After doing that, the appropriate transactions to enter in the club accounting software will be shown below.
Note that the dates of the transactions are not all the same.
There is no "ex-dividend" date for these transactions, so leave that field blank if it's requested.
Club Accounting Software used: bivio.com
Cash Amount Ticker Transaction
12/23/2008 $6,754.43 BRL Investments, Income: Distribution Type = Long-Term Capital Gain
12/23/2008 $0.00 BRL Investments, Income: Distribution Type = Short-Term Capital Gain
12/23/2008 $3,930.27 BRL Investments, Income: Distribution Type = Return of Capital
12/24/2008 none BRL & TEVA Investments, Merger: Shares = 167.95601, Cash Received = 0
Corporate reorganization fee, if any, charged by your broker. Enter it as a "Return of Capital"
12/25/2008 ($20.00) TEVA
transaction (see above) using a negative value for the amount of the fee.
as per broker as per broker TEVA Investments, Sold: Shares = 0.95601; Net Amount = cash received in lieu of fractional shares
Verify the following amounts vs. your own records and brokerage statements.
267.78700 Shares of BRL held before merger.
167.95601 Shares of TEVA received due to merger.
$10,684.70 Cash received due to merger. This does not include cash received "in lieu" of fractional shares.
Verify the following amounts vs. your own records and club accounting software reports.
$11,049.93 Tax Basis of BRL shares before merger (total original purchase costs).
$7,139.66 Tax Basis of all TEVA shares received (before cash received in lieu of fractional shares).
$7,099.02 Tax Basis of the 167 whole TEVA shares remaining after sale of the 0.95601 fractional shares.