ONEOK was an LP that became a 'C' Corp. My shares were exchanged out/in on the same day from Fidelity. Are the proceeds taxable? The K1 says there was no gain/loss.

[TomYoung]

Here's what ONEOK has to say about that:

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The exchange of OKS units for OKE common stock should be treated as a sale of your OKS units in a taxable transaction for U.S. federal income tax purposes. A U.S. holder of OKS units should recognize a gain or loss.

You can estimate your gain or loss from the transaction through the following process. This calculation is an estimate only. You will not be able to calculate your actual, final tax effect from this transaction until you receive your final Schedule K-1 and supporting materials (expected to be delivered in March 2018).

1. Calculate your estimated consideration received in the transaction by multiplying the number of OKS units you own by 0.985 to estimate the number of whole shares and cash in lieu of fractional shares of OKE common stock you will receive. Multiply the number of whole shares by the closing price of OKE stock on the transaction close date to determine the estimated “sales price.”
2. If the exchange ratio from Step 1 results in a fractional share of OKE common stock, you will receive cash in lieu of the fractional share. No fractional shares of OKE common stock will be issued. Cash in lieu of fractional shares will be computed by multiplying the fractional interest by the average of the closing OKE share price for the five consecutive full trading days ending on the full trading day immediately preceding the transaction close date. Add cash received in lieu of fractional shares to the “sales price.”
3. Reduce the “sales price” by your estimated adjusted tax basis in OKS units. Your estimated basis in OKS units at December 31, 2016, will be outlined on your Schedule K-1 for 2016 that you will receive in early March 2017.
4. Further reduce this basis number at December 31, 2016, by any OKS distributions you receive in 2017.
5. Any 2017 OKS taxable income or loss before the transaction will also be allocable to you. Taxable losses allocable to you will reduce your basis and increase your realized gain in the transaction, while any taxable income allocable to you will increase your basis and decrease your realized gain in the transaction.
6. Any ordinary gain generated from the transaction may be reduced by any passive loss carryforwards, to the extent such passive loss carryforwards are available.

The tax consequences of the transaction to each OKS unitholder will be unique and depend on the OKS unitholder's particular facts and circumstances. You should consult your own tax advisor to determine the specific consequences to you of the transaction, including under the laws of any applicable state, local or foreign jurisdiction, and under any applicable U.S. federal laws other than those pertaining to income taxes.

You can visit the website https://www.taxpackagesupport.com/oneok to estimate your gain or loss on this transaction via the online K-1 support. Unitholders not registered with the website will need to register to access the website. Please note the gain/loss calculator will calculate a unitholder’s estimated gain or loss based on the unitholders tax basis at December 31, 2016. OKS 2017 operating activity will not be reflected in the estimated results from the gain/loss calculator. Any ordinary gain generated from the transaction may be reduced by any passive loss carryforwards, to the extent such passive loss carryforwards are available.

THE LINK TO THE TAX PACKAGE SUPPORT WEBSITE IS PROVIDED FOR CONVENIENCE ONLY, AND THE INFORMATION CONTAINED ON THE TAX PACKAGE SUPPORT WEBSITE IS EXPRESSLY NOT INCORPORATED BY REFERENCE INTO THIS DOCUMENT. YOUR ORIGINAL BASIS INFORMATION WAS PROVIDED TO THE OPERATOR OF THE TAX PACKAGE SUPPORT WEBSITE BY YOUR BROKER AND YOU SHOULD CONSULT YOUR BROKER AND TAX ADVISOR TO CONFIRM YOUR BASIS INFORMATION. ONEOK DOES NOT OPERATE THE WEBSITE, CANNOT GUARANTEE THE ACCURACY OF THE INFORMATION ON THE WEBSITE AND DISCLAIMS ANY RESPONSIBILITY FOR SUCH INFORMATION.

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There's quite a bit further tax info at ONEOK's site and you probably should read it.

http://ir.oneok.com/oneok-partners/oke-oks-transaction-faq

Tom Young

[823annie]

Thank you, Tom.  The only part that I know is the fractional share but the rest (250 shares worth) eludes me.  I want to cry.

[823annie]

Hi again, Tom.  This is still a mystery and I got 2 answers from the folks at Oneok.  One said to subtract the 'ordinary gain' on the K-1 schedule from the proceeds.  The other said to consult a CPA.  Please help!  I still want to cry.  Liz