Does Turbo Tax Premier allow reporting of a stock and cash exchange on a merger?

[13660union]

My 1099B shows gross proceeds for the sale of Digital Globe stock without a cost basis. I received cash $17.50/share plus .3132 shares of Maxar for each share of Digital Globe surrendered. I have my cost basis by lot and can calculate the gain vs boot received for each lot. In some cases the gain this less and in some cases the boot is less. I can to report the lessor of gain vs boot for each lot but cannot figure out how to do this in TurboTax Premier.  The "Stocks, Mutual Funds, Bonds, Other" section of Investments does not allow the flexibility to do this. How can I correctly report these transactions??

[13660union]

what basis do I report on Schedule D for the following Lots traded on the merger.
1) Trade 652 share DG long term
2) Cost Basis $24,000
3) Proceeds reported on 1099B of uncovered security $22,629
4) Value of exchange from merger $14,984 (11,410 in cash remainder in stock)

[13660union]

what basis do I report on Schedule D for the following Lots traded on the merger.
1) Trade 652 share DG long term
2) Cost Basis $24,000
3) Proceeds reported on 1099B of uncovered security $22,629
4) Value of exchange from merger $14,984 (11,410 in cash remainder in stock)

[13660union]

Lot 2
1) Trade 698 shares DG long term
2) Cost Basis $10,058
3) Proceeds reported on 1099B of uncovered security $24,218
4) Value of exchange $16,030 ($12,215 cash, $3815 in stock, 218 shares @ $17.50)

Also, what is the basis of my newly acquired stock?

[13660union]

Lot 2
1) Trade 698 shares DG long term
2) Cost Basis $10,058
3) Proceeds reported on 1099B of uncovered security $24,218
4) Value of exchange $16,030 ($12,215 cash, $3815 in stock, 218 shares @ $17.50)

Also, what is the basis of my newly acquired stock?

[TomYoung]

I went over and looked at the Form 8937 issued by Maxor

<a rel="nofollow" target="_blank" href="https://mdacorporation.com/docs/default-source/corporate/investor/current-documents/form-8937.pdf?sf...>

and this is NOT one of the deals I thought you were describing where you have to do your reporting on a lot by lot basis, where losses cannot be recognized and gains are limited to the lesser of the actual gain based on all the proceeds or the cash received.  

Instead you simply use as proceeds the combination of cash plus stock, and subtract your basis in the stock tendered to come to a gain or loss.

Your basis in the new stock is the same as the "proceeds" element of the stock in the sale.  It's "as if" you received all your proceeds in cash that then immediately took some amount of these proceeds and bought the new stock.  Using your "Proceeds" figure for the two lots it looks like the broker is using a per share fair market value of something in the $54.91 - $54.94 range.  (Maybe there's some sort of rounding going on that I don't understand.)

I have no idea what your 4) item is telling me.  What is this "value of exchange" and where is it coming from?  At first I thought the figure was the stock value but then realized that the "value of exchange" plus the cash received didn't come back to the proceeds being reported.

[13660union]

Thank you! Makes perfect sense. The 8937 is what I needed. Much simpler to report aggregate and recognize loss/gain. Item 4 should have equaled the proceeds-my error in stock price calculation! Appreciate your help.

[TomYoung · Accepted solution]

You need to determine for each lot how you're going to report the sale of the stock, then you enter it accordingly.

Assuming that this is a deal that allows you to report gain, but not losses, and the gain is the lesser of the cash received or the actual gain based on the "proceeds", (cash + stock), you DERIVE a basis to use for each trade in order to come to the correct answer.

I don't know how the broker is reporting the proceeds to you - either just the cash or the cash + FMV of the stock - but it doesn't really matter as the process is the same either way:

• Have a loss?  Report basis equal to proceeds
• Have a gain?  Use whatever basis you need to in order to report that gain.

The actual numbers you use here will depend on what "proceeds" the broker's reporting but the strategy is always the same: use whatever basis against the reported proceeds that gets you the correct answer.

Tom Young