Recording and Accounting for the Time Warner / AT&T Cash and Stockl Merger

Tom Young

myoung said:

It closed last Thursday.  AT&T stock and the cash have already been distributed to Time Warner owners.  

Generally, that will give you the correct answer for the basis of the new stock but it won't mimic how the transaction will be reported on your income tax return; you'll have to remember to report that properly, i.e., basis reported equal to the proceeds reported by the broker on the 1099-B.

If you have many different lots what you propose will be a shortcut, but of course if the IRS asks you about your reporting 2 or 3 years down the road the Quicken record won't reflect what you actually did with the income tax return so you'll have to remember exactly what you did, and why.

Unknown

myoung said:

It closed last Thursday.  AT&T stock and the cash have already been distributed to Time Warner owners.  

Thank you Tom for your response. It was extremely helpful.

If I recall correctly my broker historically has left cost value off the 1099B for older purchases, leaving it to me to determine; especially for those equities that have multiple lots and have had several mergers and acquisitions. It will be interesting to see how they treat this on the 1099B. In any case I will keep my supplemental worksheets on hand to support what ultimately gets reported to the IRS.