I had some VMW ESPP shares from 2015, which got converted to AVGO shares plus cash when WMware merged with Broadcom in 2023 (form 8937 link below)
This year I got 1099-B from ETrade that includes the cash amount I received from the merger as a capital gain with cost basis $0. Based on the form 8937 instructions, this looks correct, since the cash received is less than my capital gain from the entire consideration (AVGO at FMV + cash).
However, the cost basis of my AVGO shares at ETrade now shows as $0. This isn't right, but ETrade says it most likely won't be providing the cost basis for these AVGO shares. What cost basis should I report when I sell these AVGO shares? Is it the cost basis of VMW I had before the merger?
For example:
Original VMW shares purchased in 2015 - 100 x $100 (cost basis $10000)
After merger in 2023 received - $4800 and 13 shares of AVGO (plus some cash in lieu of fraction)
1099-B reports $4800 long term capital gain with $0 cost basis
My questions:
1. Is the 1099 correct and I just need to report it as is on 2023 tax return?
2. What is the cost basis of my AVGO shares now? Is it $10000, which was the cost basis of my VMW ESPP?
3. 15% ESPP discount has to be reported as ordinary income. I assume this needs to be done when I sell AVGO shares, is this correct?
Thanks!
