Hi everyone - please bear with this one as there are some details that seem confusing to me based on topics I have read on subject sale and how info was reported on my 1099-B.
Some of you may have had a similar situation.
- Received 14.21 shares of TTWO + cash to boot [$3.50 per Zynga shares (350) = $1,225] in exchange for ZNGA.
- Cost basis on ZNGA was $3,451 acquired on 7/22/2020.
- I was informed market value/share of TTWO on 5/21/2022 was $116.12, therefore market value of TTWO on 5/21/2022 closing was $116.12 x 14.21 = $1,650.06.
Here is where it gets a little confusing based on my 1099-B statement for the reporting sales of ZNGA.
- 350 shares sold on 5/24/2022 [proceeds reported = $1,225 <-boot cash only? + cost basis reported $3,451 = loss reported $2,226].
I'm understanding that I should really report the ZNGA cost basis as $1,225 for a no loss/gain result based on the fact that the boot cash is only taxable AND is the same amount to reduce on the TTWO cost basis.
- *IS THIS CORRECT?
- If so, cost basis of 14.21 shares of TTWO is [$3,451 (old Zynga basis) - $1,225 (cash to boot) = $2,226].
- Then TTWO price/share [$2,226 / 14.21 = $156.65].
- Since they paid me cash ($25.76) instead of the fractional .21 share, I end up with the adjusted cost basis [$2,226 - ($156.65 x .21) = $2,193.10 for the 14 shares].
- Cost basis on .21 shares = $32.90 at date of merger 5/24/22.
- **Is it correct that the holding period for the 14 TTWO shares (i.e. takes on the original ZNGA date acquired) now becomes the former stock's acquired date 7/22/2020? (My statement says otherwise - 5/24/2022?).
If what I have laid out above is not completely correct the only other way, I would think this is handled is if the merger was fully taxable. Maybe this is the question to have asked up front.
- ***Would I need to include the cash to boot total + the market value of the 14.21 TTWO shares as my corrected 1099-B proceeds (i.e. $2,875.07) for the sale of the 350 ZNGA shares with the original cost basis of $3,451 AND my 14 shares of TTWO cost basis adjusted at $1,625.68 (acquisition date 5/24/2022)?
My apologies for all this detail. But this all stems from how my broker reported the info on my 1099-B.
It seems like either a correction for the proceeds or the cost basis needs to be made for the disposed 350 shares of ZNGA based on what is taxed.
