Mergers for GLC

Considerations

If you received a combination of cash and shares, and the merger was a taxable event for gain to the extent of cash received, and not for loss.

Calculate the value of the new package received by multiplying the new share ratio (The "new share ratio" determines the number of new shares received for each old share you own) by the fair market value (FMV) of the new shares on the effective date of the merger, as supplied by the company, and adding the cash received per share to this figure. For example, if the FMV was $10.00 and you received .5 of a share of the new stock for each old share you owned, your new share value is $5.00. If you received $1.00 in cash per old share, add this to the $5.00 new share value to arrive at your new package value of $6 ($10*.5 + $1).

For each old lot you owned, subtract the cost per share from the new package value to determine the gain or loss. If you calculate a gain, compare this figure to the cash per share amount and click the link below for either option I or option II. In this case, you can only recognize a gain up to the cash amount. If you calculate a loss, click the link for option III.

1. If the gain you calculated is greater than the cash amount, your sell price for each lot becomes the sum of your cost/share for each old lot and the cash per share received.

   A. Record a Specific ID Sell in GT using these guidelines:

   • Sell Date = Merger effective date (the date set by the company and stock exchange for de-listing the old security).

   • Shares = Your original number of shares.

   • Price = The new package value.

   B. Record one Deposit Transaction for the new stock, for each old lot:

   • Purchase Date = Lot date of the old stock (as listed on your unrealized report).

   • Deposit Date = Merger effective date.

   • Shares = The number of new shares received for this lot specifically, calculated by multiplying the old shares by the ratio of new shares received.

   • Cost basis = Total cost of the lot you are selling.

2. If the gain you calculated is less than, or equal to the cash amount, your sell price for each lot becomes the new package value.

   A. Record a Specific ID Sell in GT using these guidelines:

   • Sell Date = Merger effective date (the date set by the company and stock exchange for de-listing the old security).

   • Shares = Your original number of shares.

   • Price = The new package value.

   B. Record one Deposit Transaction for the new stock, for each old lot:

   • Purchase Date = Lot date of the old stock (as listed on your unrealized report)

   • Deposit Date = Merger effective date.

   • Shares = The number of new shares received for this lot specifically, calculated by multiplying the old shares by the ratio of new shares received.

   • Cost Basis = The fair market value of the new stock supplied by the company multiplied by the number of new shares received.

3. If you calculated a loss

   A. Record a specific ID Withdraw Transaction using these guidelines:

   • Withdraw Date = Merger effective date (the date set by the company and stock exchange for de-listing the old security).

   • Shares = Your original number of shares.

   • This approach will remove your position without creating any loss.

   B. Record one Deposit Transaction for the new stock for each old lot:

   • Purchase Date = Lot date of the old stock (as listed on your unrealized report).

   • Deposit Date = Merger effective date.

   • Shares = The number of new shares received for this lot specifically, calculated by multiplying the old shares by the ratio of new shares received.

   • Cost Basis = Total cost for the lot you are withdrawing, less the total cash received for this lot.