Considerations
If you received shares only, and the merger is taxable for gain, but not for loss:
Calculate the value of new shares 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. For example, if the FMV was $10.00 and your new share ratio was .5 (i.e. you received .5 share of the new stock for each old share you owned), your new share value is $5.00 ($10*.5). For each lot you own, compare the new share value to the cost/share of the old stock (as listed on your unrealized report). Then click either option I or option II below.
I. If the new share value is less than the cost/share
A. Record a specific ID Withdraw Transaction to remove the old stock 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 correctly 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 of the old lot (as listed on your unrealized report).
II. If the new share value is greater than or equal to the cost/shares
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 share 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.