OT - A Tax question

[knightfan7]

I always do my own taxes as my returns are pretty basic. This year is a bit different.

I held shares of Chubb Ins. With the merger last year I received cash and shares of the new company. I believe my tax obligation is for the difference between the cash and stocks I received and the value of Chubb at the time of the merger.

Is it really that simple or am I missing something?

 

[Crazed_RU]

Wouldn't you need to know the cost basis of the original Chubb stock when you acquired it? Capital gains on the overall gain. Then you reset the basis with the new stock. I think that's where I would start and then do what you are doing - ask other people, but preferably an accountant.

 

[knightfan7]

Wouldn't you need to know the cost basis of the original Chubb stock when you acquired it? Capital gains on the overall gain. Then you reset the basis with the new stock. I think that's where I would start and then do what you are doing - ask other people, but preferably an accountant.

Thanks. That's why I was wondering. I figured I might be incorrect. If I am I may have break down and see an accountant.

 

[BigLou]

I always do my own taxes as my returns are pretty basic. This year is a bit different.

I held shares of Chubb Ins. With the merger last year I received cash and shares of the new company. I believe my tax obligation is for the difference between the cash and stocks I received and the value of Chubb at the time of the merger.

Is it really that simple or am I missing something?

Suprisingly, this appears to be a taxable event:
"The receipt by U.S. holders (as defined in the section titled “Material United States Federal Income Tax Consequences”) of ACE common shares and cash pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes. Accordingly, a U.S. holder will recognize capital gain or loss equal to the difference between (i) the sum of the fair market value of the ACE common shares on the date of the exchange and the cash consideration received as consideration in the merger and (ii) the U.S. holder’s adjusted tax basis in the shares of Chubb common stock surrendered in the exchange. A U.S. holder’s adjusted basis in the shares of Chubb common stock generally will equal the holder’s purchase price for such shares of Chubb common stock, as adjusted to take into account stock dividends, stock splits, or similar transactions. If a U.S. holder acquired different blocks of shares of Chubb common stock at different times and different prices, such holder must determine its adjusted tax basis and holding period separately with respect to each block of shares of Chubb common stock."

https://new.chubb.com/en/latam/investors-faqs.aspx

 

[knightfan7]

Suprisingly, this appears to be a taxable event:
"The receipt by U.S. holders (as defined in the section titled “Material United States Federal Income Tax Consequences”) of ACE common shares and cash pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes. Accordingly, a U.S. holder will recognize capital gain or loss equal to the difference between (i) the sum of the fair market value of the ACE common shares on the date of the exchange and the cash consideration received as consideration in the merger and (ii) the U.S. holder’s adjusted tax basis in the shares of Chubb common stock surrendered in the exchange. A U.S. holder’s adjusted basis in the shares of Chubb common stock generally will equal the holder’s purchase price for such shares of Chubb common stock, as adjusted to take into account stock dividends, stock splits, or similar transactions. If a U.S. holder acquired different blocks of shares of Chubb common stock at different times and different prices, such holder must determine its adjusted tax basis and holding period separately with respect to each block of shares of Chubb common stock."

https://new.chubb.com/en/latam/investors-faqs.aspx

Thanks Lou. Boy this is going to be complicated with splits and expensive tax wise. Crap.

 

[Knight Shift]

Thanks. That's why I was wondering. I figured I might be incorrect. If I am I may have break down and see an accountant.

I know a guy in Spring Lake Heights, and he has been fairly reasonable. Hit me with a message if you want his name.

 

[BigLou]

Thanks Lou. Boy this is going to be complicated with splits and expensive tax wise. Crap.

Listen, provided you did not acquire any shares within 12 months of thee merger, everything is long term. If that's the case report it all on 1 line. You know what your proceeds are - I assume you will get a 1099. Then just add your cost basis from purchases plus any dividend reimbursement to arrive at your basis. Splits do not change your basis. If you have any shares bought less than a year before you can carve that piece out.

I am assuming you were not holding shares in a brokerage account because if you were they may have your cost basis.

 

[BigLou]

Thanks Lou. Boy this is going to be complicated with splits and expensive tax wise. Crap.

You sound a bit like the guard in "Shawshank Redemtion" complaining about an inheritance.

Which would make me Tim Robbins.

Now you have to buy the beer.

 

[knightfan7]

You sound a bit like the guard in "Shawshank Redemtion" complaining about an inheritance.

Which would make me Tim Robbins.

Now you have to buy the beer.

My mom was a long time Chubb employee. Insisted we have shares.

Not complaining. Just in over my head as usual.

Yes, the beer is on m.e

 

[RUfan]

My father is a CPA and works for himself in Monmouth County if you wanted to talk to someone he could certainly help. Send me an email if you want [email protected]