Cash in lieu of stock ratio
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Returning Member

Cash in lieu of stock ratio

A merger resulted in cash being added to my in-house account at TD Ameritrade. The statement for that period does not show that I got any stock in the merger; it says PURCHASE FDIC INSURED DEPOSIT ACCOUNT. In TurboTax, select "I received cash in lieu of fractional shares as part of a merger....". Now I'm confused when I'm asked "Ratio of new shares to original shares". What do I put there since I received no shares?

3 Replies
Anonymous
Not applicable

Cash in lieu of stock ratio

can't tell you without knowing the company.  every merger is different and even the tax consequences can be different.  some mergers are completely taxable others are not taxable at all except for any fractional shares sold. if you want to keep it simple; the broker has not allocated any cost to the frac shares on the 1099B; and not many $$$'s are involved you may want to keep it simple but reporting no cost basis and a holding period going back to the original company.

Returning Member

Cash in lieu of stock ratio

Company was BIOVERATIV INC. Oldest online price history found is $44.42 on 1/18/2017. I don't see it on any of my statements, which seems odd; I don't know how or when I acquired that stock! Anyway, it was $105 on 3/8/2018 when it merged. I had 230 shares. The cash did show up as a purchase in my brokerage account under "Insured Deposit Account". Nothing showed up in the 1099B. There was an entry under "UNDETERMINED TERM TRANSACTIONS FOR NONCOVERED TAX LOTS" with no date acquired or basis that was not sent to the IRS. Hence my problem since I didn't know what to do at the time and did not include that on my tax return! Well, now I need to fix it.

Anonymous
Not applicable

Cash in lieu of stock ratio

you do know you can research this on the web just like I did

anyway here is what happened

Bioverativ (BIVV) was a subsidiary of Biogen (BIIB).  in 2/17 BIIB spun off BIVV tax-free - 1 share of BIVV for every 2 shares of BIIB.  Since it was tax-fee the holding period for BIVV is the same as for BIIB. the basis allocation was that of your original cost for BIIB 92.17% remains and 7.83% is allocated to BIVV.

 

then in 1/18 Sanofi (SNY) acquired all of BIVV stock for $105 share - fully taxable to the extent proceeds exceed BIVV basis.   

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