In a merger situation each one is uniquely different and somewhat the same.
It would seem you should report the sale as it is shown on your Form 1099-B since the broker knows how the deal came together. Your acquired date should be the date you received the original stock. For this reason the new cost basis of your TTWO stock received in the merge would not be what you calculated ($3,451 - $1225 = $2.226).
In this case the cost basis of the new stock would be value of the new stock on the date received or $1,650.06. And the new date acquired would start the holding period since this would be considered a taxable trade (see below).
- Cash to Boot. Sometimes a corporation goes through a merger where you receive stock in a new company plus some cash. The cash part is called 'cash to boot' since you got it in addition to the new stock. The typical cash to Boot transaction will not allow a loss, but in your case I would use the broker statement (Form 1099-B).
- IRS Publication 550
- Holding Period: Nontaxable trades. If you acquire investment property in a trade for other investment property and your basis for the new property is determined, in whole or in part, by your basis in the old property, your holding period for the new property begins on the day following the date you acquired the old property.
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