This is extremely complicated, especially if you have a capital loss but for some reason can't take it (very unfair)
Here are my facts. Had 40 shares of EMC and received a 1099-B that showed 80 shares sold along with a fractional number of shares in VMT of .4568. My basis is from one lot purchased in 2001 for $1524.40. The total value received was $24.05 per share on the 80 shares ($962) plus the 4.458 shares in DVMT valued at $47.20 per share for a total of $210.42. Total value received would then be $1172.42. So I assume my cost basis would be allocated to the EMC shares and the DVMT shares based on value. My EMC basis would then be: Total EMC value of 962 divided by total value of $1172.42 = .82 x basis of $1524.40 = $1240.87. My DVMT basis would be xxx.xx/xxxx.36 = .18 x $1524.40 = $273.53.
As I'm reading the above, I should calculate the 351 portion 1st.
40 shares x 20.17 = $806.80 - basis ($1240.87 x .8677 = $1076.70) = loss -$269.90 which is not deductible and lost forever? So I would report basis on this of $806.80?
40 shares x 3.88 = $155.20 - basis ($1240.87 x .1323 = $164.17 = loss of -$8.97 which is deductible.
The 1099 B reported the .458 fractional share sale at $22.20 and I would calculate my basis at (273.54/4.458 x .458 = $28.10) for a small loss of $$5.90
Tom, does this make sense to you??? I'm have a hard time understanding why I cant take a loss on the section 351 calculation though.
