Abbott merger with St jude

reginaO

How to enter Abbott Labs merger St jude
Home and business 2016

mshiggins

Are you using Quicken for Mac or Quicken for Windows?

reginaO

windows

Unknown

I would like to know the answer to this also..  Quicken doesn't seem to know how to handle these mergers/acquisitions/swaps at all.

Unknown

This may help:

http://fortune.com/2016/04/28/abbott-st-jude-merger/

1- I just entered a shares-out transaction for the St. Jude Shares. Just to get them out of my account.
2- Added a deposit to my cash account for $46.75 x (# shares of St. Jude) you owned.
3- Then a Shares-in for Abbott Labs for 0.8708 shares for each St. Jude Share.

The accounts are now balanced and positions match with my broker but not sure if this screws up tax calculations..

You can always delete these transactions once the developer provides the correct way to handle this, .... if they ever do.

Bryan

reginaO

sound reasonable. How did you handle gain on St Jude stock

q_lurker

This is among the more complicated type of mergers given there is both cash and shares being exchanged for the St Judes shares.  The cash received may be considered fully taxable as capital gains to untaxed as capital gains depending on the price you paid for the St Judes shares.  Along with that aspect then is what your basis is for the newly acquired ABT shares.  

Caveat 1:  I am not a tax pro, CPA, yada, yada, ... Do your own due diligence.
Caveat 2:  ABT should issue a Form 8937 in the coming days with their opinion on the basis adjustment.  The investor should weigh that information along with their brokerage information to reach their own "final answer".
Caveat 3:  The extent to which you follow my suggestion below can depend greatly on how accurately you expect your Quicken data to mirror the real world and associated current and future tax situations.  YMMV.

There are two known values driving this transaction - $46.75 in cash received per share of St Judes held, and 0.8708 shares of ABT received per share of St Judes held.

There is one "approximate" value applicable - the fair market value of the ABT shares received immediately after the merger.  Below, I have used the 1/4/17 hi and low trading values of 39.73 and 39.06 to determine a fair market value of those ABT shares of 39.395/share.  You, your broker, and ABT may choose to derive and determine a different value.  

From there, the following snip from an Excel spreadsheet summarizes what my approach would be depending on the price band of the St Judes shares bought.  Each lot of St Judes owned should be treated independently.






Case 3: 
Your shares were 'expensive'; Basis > Total Value Received = 81.06
per share originally held.

• You have no current cap
  gains liability with respect to this lot.
  
  
  
  
  
  
  
  
  
  
  
  
  Sell all shares of this
  lot at basis value adding cash to account
• 
  Buy proper number of new
  shares for lesser amount leaving cash received in the account as the cash you
  received (purchase price is old basis less cash received).
• 
  Your total basis for
  this lot will be less than your prior basis for this lot; you have no cap
  gains now, but will have greater cap gains in the future.  
• 
  Remove shares just
  bought,
• Add same number of shares for same cost but with original lot date as
  acquisition date.
  

Case
1:  Your shares were bought cheaply;
Basis < Value of Shares Received = 34.31 per share originally held.

• Your cap gain is limited
  by the amount of cash you received.
  
  
  
  
  
  
  
  
  
  
  
  
  Sell all shares of this
  lot for (basis + cash received) adding cash to your account
• 
  Buy proper number of new
  shares for lesser amount leaving cash received in the account.
  
  
  
  
  
  
  
  
  
  Your total basis in new
  shares for this lot will equal your prior basis for this lot.  The entire cash received is capital gains.
• 
  Remove shares just
  bought,
• Add same number of shares for same cost but with original lot date as
  acquisition date.
  

Case
2:  Your shares were bought in-between
those two price points.












Your have a current cap
gain liability, but it is less than cash received.

• Sell all shares of this
  lot for value received (81.06) value received adding cash to your account.
• Buy proper number of new
  shares for lesser amount leaving cash received in the account.
  
  
  
  
  
  
  
  
  
  Your total basis for
  this lot will be less than your prior basis for this lot.  Only part of the cash received is capital
  gains.
• 
  Remove shares just
  bought,
• Add same number of shares for same cost but with original lot date as
  acquisition date.
  

At
the end of processing all lots of the original holding, if you are left with
a fractional share, sell that fractional share for the amount of cash-in-lieu
that you received. 



That
cash will be above and beyond the cash you received as part of the
acquisition transaction.

HTH

reginaO

purchased 10-09-09 150 sh St Jude 33/sh  =$5007.10
merger Account shows :
130 Sh Abbott cost 4963.33
sale frac sh .62sh for   $24.59 cost $23.77
cash $7012.50

q_lurker

reginaO said:

purchased 10-09-09 150 sh St Jude 33/sh  =$5007.10
merger Account shows :
130 Sh Abbott cost 4963.33
sale frac sh .62sh for   $24.59 cost $23.77
cash $7012.50

@reginaO:  Based on that specific information, you bought your St Judes "cheaply".  In Quicken I would (all on 1/4/17):
a) Sell 150 shares of St Judes for $12,019.60 (= your basis + 46.75/share).  That will generate a cap gains number for you for 2017 of 7,012.50.
b) Buy 130.62 shares of ABT for $5,007.10.  Your St Judes basis moves to your new ABT holding.
c)  Remove Shares - 130.62 shares of ABT
d)  Add Shares - 130.62 shares of ABT with cost = 5007.10 and Acquisition date = 10/9/09.  Now you have the proper number of shares of ABT with the proper cost and the proper acquisition date.
e)  Sell 0.62 shares of ABT for 24.59.  This should produce a second cap gain for you of $0.82.  

You now should be showing 130 shares of ABT at a cost basis = $4,983.33

Done.

reginaO

reginaO said:

purchased 10-09-09 150 sh St Jude 33/sh  =$5007.10
merger Account shows :
130 Sh Abbott cost 4963.33
sale frac sh .62sh for   $24.59 cost $23.77
cash $7012.50

thank you. Very grateful.   I will test this

Unknown

reginaO said:

purchased 10-09-09 150 sh St Jude 33/sh  =$5007.10
merger Account shows :
130 Sh Abbott cost 4963.33
sale frac sh .62sh for   $24.59 cost $23.77
cash $7012.50

I followed your advice to regina0 with my modified numbers. I held 400 shares of St. Jude but when I add the 348.32 shares in Quicken , the register shows 316 shares and even that doesn't show in the portfolio list.
Can you help me in getting this merger and cash into Quicken 2017 correctly?
Thanks,
Ranny

q_lurker

reginaO said:

purchased 10-09-09 150 sh St Jude 33/sh  =$5007.10
merger Account shows :
130 Sh Abbott cost 4963.33
sale frac sh .62sh for   $24.59 cost $23.77
cash $7012.50

when I add the 348.32 shares in Quicken, the register shows 316 shares 

Go to the security list (Ctrl-Y) and pull up the data for ABT.  See of there was some other transaction that accounts for the share difference.
  

even that doesn't show in the portfolio list.  

Go to the Customize for that particular portfolio view, Securities tab.  Make sure that ABT is checked to be included in that presentation.  Each view is separately customized, so if you have omitted this security in any other views, they too will need to be reset.  (My preference is to leave that setting on "All securities" to avoid unintended omissions.)

HTH

Unknown

reginaO said:

purchased 10-09-09 150 sh St Jude 33/sh  =$5007.10
merger Account shows :
130 Sh Abbott cost 4963.33
sale frac sh .62sh for   $24.59 cost $23.77
cash $7012.50

OK, did that but still shows it incorrect. I even deleted the transaction and reentered it. I have never held ABT before so there should be no residual shares. I cannot understand where the 316 shares comes from.

q_lurker

reginaO said:

purchased 10-09-09 150 sh St Jude 33/sh  =$5007.10
merger Account shows :
130 Sh Abbott cost 4963.33
sale frac sh .62sh for   $24.59 cost $23.77
cash $7012.50

@Rannny:  Does ABT show in the Porttfolio view now?  If so, and you back off the As off date to before the merger, does it show ABT shares?

Run a file validation and repair including the rebuild lots option.  
When you delete the transactions, do the residual (negative) shares show in the Portfolio view?
If you Add Shares 1 share (rather than 348.32) same residual effect?
If you Add Shares on a much earlier date, same residual effect?

Be sure when you look at the security list, you choose to view hidden securities.  

I'll need some other clue from you to go any farther.  

Unknown

reginaO said:

purchased 10-09-09 150 sh St Jude 33/sh  =$5007.10
merger Account shows :
130 Sh Abbott cost 4963.33
sale frac sh .62sh for   $24.59 cost $23.77
cash $7012.50

Thanks, I ran the validation and the shares are now correct in the account but still do not show in the portfolio view. I do note that the cost information is shown as a blue N/A indicating a placeholder entry but the transaction entry shows the cost correctly. The security is checked and not hidden. I doesn't let me correct the cost entry. ??