Tom Young, hello from Madison WI and *thank you* for so many instructive and detailed answers to all our TT questions. I am hoping you might help with mine, esp since you seem to have good knowledge of how to handle the endless HP spinoffs. In a nutshell:
In September 2017 I received shares in HP spinoff Seattle SpinCo that automagically became 412 shares (actually ADRs) in the UK-based firm Micro Focus. I have held those shares ever since. In April/May 2019 Micro Focus went through a series of transactions that produced a large taxable dividend payment and what Fidelity has marked as a reverse stock split, causing my 412 shares to now become 314 shares of a very similarly named entity MicroFocus Int'l PLC. (I also received cash in lieu of a fractional share at the time of that reverse split.) Now I have a 1099-B from Fidelity which shows (in 5 lots) the sale of my 412 original shares of MFGP, but with $0.00 as the proceeds and unknown for both the cost basis and acquisition date. I presume and some documentation from the UK company sets an expectation that the reverse split should not produce a tax liability. But they give no guidance on how to report. I can enter the acquisition dates and I can calculate my basis in each lot . . . but with $0.00 as the proceeds that would produce a loss which I didn't actually incur (since I have the new shares, which still have some value, in place of those which were sold). Should I enter $0.00 as the cost basis in TurboTax? This would produce the expected no net tax impact, which I believe is the correct outcome, but I really worry about putting anything into a return that seems at odds with the facts in hand. I did search TTax help for any earlier answers to this specific question, but did not find one. I apologize in advance if you have addressed the question re MFGP revers stock split and I failed to find it. Anyway, I would sincerely appreciate any insight you might share into this question--it would have been so much simpler had Fidelity issued a 1099 that made clear this was a move by the company's management and not any sale done at my direction. Anyway, would welcome your guidance and am happy to get in touch some other way if that is more convenient. --Leigh Cagan
