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How do I record the buyout of ITC by Fortis where I got stock shares and cash in Quicken 2016?

Unknown Member
edited July 2018 in Investing (Windows)

Fortis bought ITC paying $25.87 in cash per share owned and paying $22.57 per share for ITC shares held.


  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
    edited May 2018
    I have not been able to find any statements from Fortis or ITC about the tax consequences of this transactions.  Usually, the companies will identify if this is considered a taxable transactions (for the investor) or a transaction with limited or no current tax consequences.  Lacking that specificity, I cannot offer specific suggestions to you. 

    What I did see reported with respect to the original offer and as the deal closed was that the ITC shareholder should have received for each share of ITC $22.57 in cash and 0.752 shares of Fortis.  This is not Fortis paying $22.57 for each ITC share as suggested in your question.  

    Fortis on 10/14/16 opened at $31.03, traded at high and low values of $32 and 31.03, and closed at $31.66.  It is typically the investor's decision on the fair market value of those received shares immediately after the closing, and an investor might choose to use the hi/lo average which would be $31.515/share.  That leads to a total value received by the ITC shareholder of $22.57 + 0.752 * 31.515 = $46.275 / ITC share.  That is effectively what Fortis is paying for the ITC shares.

    Typically, if as a taxable transaction, the Quicken user would be selling the ITC shares for the $46.275 / share (incurring applicable capital gains) and then buying shares of Fortis at the $31.515 rate establishing a new position with Fortis with a new basis and new acquisition date.  Any fractional shares so bought would then be sold for the cash-in-lieu amount received (different than the $22.57 figure)

    As a non-taxable transaction, the new Fortis holding carries over the original acquisition date applicable to the ITC holding and some or none of the cash received (the 22.57) would be treated as current capital gains income.  The Quicken user would then be doing a series of sells, buys, adds and removes to get the data properly represented.  

    Since I can't find any more specifics, I won't offer anything more specific.  If you can provide a more definitive link, that may clarify the transaction details.  

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