From the instructions on the Cost Basis report, it looks like the loss at time of merger was not allowed but a gain would have been taxable. It said if the cash to boot or total of cash to boot appears on the 1099B to enter it as both the Sale and Cost Basis with a gain of $0. As mine only showed the $10,500 cash on my 2016 1099B as I still owned the MAR stock at the end of the year, I only entered that amount so it would appear from example 3 of the link that shows my scenario that I have to adjust the cost basis as step 4 says no loss allowed.
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