How to record a tax-free corporate merger (without losing the holding period and lots)

D Bunker
D Bunker Member
edited March 2019 in Investing (Windows)
Using Premier 2019.

I am working on the cost basis of the Baby Bells. NYNEX and Bell Atlantic merged on 08/14/1997. The S-4 reports that the merger would be tax-free (except for sales of fractional shares).

My understanding is that the lots of the absorbed stock (NYNEX) retain their original purchase dates for tax purchases (long term vs short term gains).

I used "Corporate Acquisition" and ended up with a single lot of NYNEX dated 08/14/1997. Is there a method that preserves the original purchase date and lots?

Thanks.

Best Answer

  • D Bunker
    D Bunker Member
    Accepted Answer

    I repeated what I thought was the same operation (Corporate Acquisition), but got the desired result this time, with lots and proper dates. A mystery indeed! Thanks.

Answers

  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
    edited March 2019
    QW 2017 (I believe QW2019 does the same) generates a Remove Shares for the acquired company and a series of Add Shares for the acquiring company.  The individual Add Shares transactions will have a transactions as the date of the acquisition (8/14/97 in your case) but the acquisition date for the lot should still carry the original  acquisition date.  

    Edit:  I meant to add, you can enter those Remove and Add Shares transactions yourself or edit them accordingly as well.
  • D Bunker
    D Bunker Member
    Accepted Answer

    I repeated what I thought was the same operation (Corporate Acquisition), but got the desired result this time, with lots and proper dates. A mystery indeed! Thanks.

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