certain mergers are tax-free. there is no gain or loss is reported when the companies merge except to extent that boot (usually cash is received) fractional shares are not usually issued they are sold and you get the cash. the cash you received is taxable as capital gain. most of the time no cost basis is assigned. you can probably go to either of the company's websites and find out whether the transaction is taxable or you can call stockholders relation line or ask the broker since the company are required to report the tax status of the merger so proper tax reports can be sent out.
