How do I report California capital loss when I sell stock acquired through tax free M&A? I paid original stock $1, received merger stock for $100, and sold it for $40.

mpanic · ‎July 7, 2019

I purchased 1000 shares of company A for $1 per share.
Then company B acquired the company A through tax free merger for cash and stock deal.
For my original shares I received 200 shares of company B at FMV $100 per share.
Since it was "tax free" merger, I don't have to pay any taxes until I sell the new company B stocks.

When I sold 100 shares of company B for $150 per share, I reported capital gain of $15000-$500=$14500

When I sell 100 shares of company B for $40 per share, do I report capital loss or capital gain?

If I have to report capital loss, how do I calculate it?
What's the cost basis for the new company B stock, as it was issued to me at the price $100 per share, and I sell it for $40 per share, but I only spent $1000 when I purchased the original company A stock?

How do I report California capital loss when I sell stock acquired through tax free M&amp;A? I paid original stock $1, received merger stock for $100, and sold it for $40.

How do I report California capital loss when I sell stock acquired through tax free M&A? I paid original stock $1, received merger stock for $100, and sold it for $40.