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Old 10-13-2015, 06:32 PM
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Cash to Boot tax question

I'd really appreciate help with this question.

My company is in the process of being taken over. I currently own 1044 shares in my company. As part of the merger, I will receive $6.25 for each share I own in my current company, as well as 0.35 for each share in the newly formed company.

The $6525 I will receive in cash ( 1044 x $6.25) is taxed as capital gains. How do I report the $6525? The 1044 shares I own were part of my company's ESPP, and were purchased in 5 different lots, over the course of 2 and 1/2 years. What is my cost basis and what rate of CGT do I use, long term or short term?

Thanks.



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Old 10-15-2015, 04:48 AM
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Quote:
Originally Posted by Kier View Post

The $6525 I will receive in cash ( 1044 x $6.25) is taxed as capital gains. How do I report the $6525? The 1044 shares I own were part of my company's ESPP, and were purchased in 5 different lots, over the course of 2 and 1/2 years. What is my cost basis and what rate of CGT do I use, long term or short term?

Thanks.
UNLESS you trade old shares for new through a merger or acquisition,
If you receive cash in the deal, you report that amount to the IRS as a gain; you need to report the gain on form 8949/ Sch D of 1040 and on your 1040 line 13.
And you need to complete the Qualified Dividends and Capital Gain Tax Worksheet in the instructionsfor Form 1040, line 44 . The capital gains tax rate for most taxpayers is 15% if your marginal tax rate is higher than 15%, although some low-income taxpayers pay 0% if your tax rate is lower than 25%. To report your long-term capital gains and calculate the tax, you must complete Form 8949, Schedule D and Form 1040.
The 1044 shares I own were part of my company's ESPP, and were purchased in 5 different lots, over the course of 2 and 1/2 years. What is my cost basis and what rate of CGT do I use, long term or short term?=>Long term capital gain.



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