How to treat UTX and RTX shares

shelquis

Regarding recent Merger of UTC and Raytheon. Should I treat my new RTX stock as a new stock, or just rename my prior UTX shares as RTX?

Frankx

Okay, so basically here's a brief summary what you need to do whether you owned United Technologies or Raytheon:

If you owned United Technologies ("UTC")...
a) Immediately prior to the merger transaction on 4/3/20, UTC spun off two of its subsidiaries, namely Carrier Global and Otis Worldwide, to UTC shareholders as separate companies. Each shareholder received 1 share of Carrier and 0.5 share of Otis. So first, you'll need to allocate a portion of your cost basis in UTC to each of Carrier & Otis. The company suggests that you may allocate that basis according to the relative closing stock prices of each company (i.e.UTC, Carrier & Otis) at the close of business on 4/2/20. 

b) After the above spin-off, on 4/3/20 UTC merged with Raytheon Company, and changed its name to Raytheon Technologies Corporation and began trading under ticker RTX.

Further information on the above transaction (including illustrative basis calculations) is included in the IRS form 8937 for UTC https://investors.rtx.com/static-files/2d479c0a-d3a6-4088-b53e-94903db21198

If you owned Raytheon Company  ("RTN")...
a) Each share of Raytheon common stock issued and outstanding on 4/3/20 was cancelled and converted into the right to receive 2.3348 shares of UTC common stock.  No fractional shares were issued therefore there will be "cash in lieu" distributed to certain Raytheon shareholders.  United Technologies then changed its name to Raytheon Technologies Corporation and started trading under ticker symbol RTX.

Further information on the above transaction is included in the IRS form 8937 for RTN https://investors.rtx.com/static-files/4085ba22-0f57-4885-8e24-fa5ec337bc20

Hopefully the above will assist you in understanding the transactions that will need to be made in Quicken, but also be advised that if you download transactions from your broker, you should double check those entries to ensure hey reflect the guidance issued by the companies on the 8937 forms.

Frankx

It should be noted that tax laws and regulations are complex, that I am not providing tax or legal advice in this or any other posting, and Forum members should consult with their own tax and/or legal advisors before taking action.

Frankx

HI @shelquis,

It may be more complicated than that depending on your circumstances...

A couple of questions first - From the above it sounds like you were a holder of United Technologies prior to the merger, is that correct or did you hold Raytheon?  Also, are the shares of whichever company you owned prior to the merger held in a brokerage account from which you download transactions into Quicken?

Frankx

Frankx

Okay, so basically here's a brief summary what you need to do whether you owned United Technologies or Raytheon:

If you owned United Technologies ("UTC")...
a) Immediately prior to the merger transaction on 4/3/20, UTC spun off two of its subsidiaries, namely Carrier Global and Otis Worldwide, to UTC shareholders as separate companies. Each shareholder received 1 share of Carrier and 0.5 share of Otis. So first, you'll need to allocate a portion of your cost basis in UTC to each of Carrier & Otis. The company suggests that you may allocate that basis according to the relative closing stock prices of each company (i.e.UTC, Carrier & Otis) at the close of business on 4/2/20. 

b) After the above spin-off, on 4/3/20 UTC merged with Raytheon Company, and changed its name to Raytheon Technologies Corporation and began trading under ticker RTX.

Further information on the above transaction (including illustrative basis calculations) is included in the IRS form 8937 for UTC https://investors.rtx.com/static-files/2d479c0a-d3a6-4088-b53e-94903db21198

If you owned Raytheon Company  ("RTN")...
a) Each share of Raytheon common stock issued and outstanding on 4/3/20 was cancelled and converted into the right to receive 2.3348 shares of UTC common stock.  No fractional shares were issued therefore there will be "cash in lieu" distributed to certain Raytheon shareholders.  United Technologies then changed its name to Raytheon Technologies Corporation and started trading under ticker symbol RTX.

Further information on the above transaction is included in the IRS form 8937 for RTN https://investors.rtx.com/static-files/4085ba22-0f57-4885-8e24-fa5ec337bc20

Hopefully the above will assist you in understanding the transactions that will need to be made in Quicken, but also be advised that if you download transactions from your broker, you should double check those entries to ensure hey reflect the guidance issued by the companies on the 8937 forms.

Frankx

It should be noted that tax laws and regulations are complex, that I am not providing tax or legal advice in this or any other posting, and Forum members should consult with their own tax and/or legal advisors before taking action.

q_lurker

I've posted my thoughts on this event here:
https://community.quicken.com/discussion/7875091/my-approach-to-utx-otis-carr-rtn-rtx/p1?new=1