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Exhanging Bond Issues

David Bruns
David Bruns Member ✭✭
edited July 2018 in Investing (Windows)
How to I handle the transaction of a bond issuer exchanging an issue into two smaller individual  issues, e.g. 50K into 30K & 20K, everything the same as the original bond except for CUSIP numbers?  Also  a non-taxable event.  W10, Q16 Premier.


  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
    edited May 2018
    I would do a Removes Shares taking out the 50K holding followed by two Add Shares transactions adding in the 20K and 30K holdings.  Allocate the original cost basis of the 50K bonds to the two new one as directed by the broker.  Also, (from what you said) be sure to specify the original acquisition date for the two Add Shares transactions.  

    The Remove Shares transaction will appear in cap gains reports (assuming this is in a taxable account), but the gain will be shown as $0 and thus have no real effect.  
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