New Member

posted Jun 5, 2019 2:29:06 PM

For the Johnson Controls/Tyco merger, do you have to pay capital gains taxes on the fair market value of the shares before the merger, or just on the cash received?

Before the merger, I had 277 shares of JCI; after the merger and the cash received, I still had 232 shares of JCI. The 1099-B lists the proceeds sold as 240 shares, the number of shares originally purchased.

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Level 13

Jun 5, 2019 2:29:08 PM

"For the Johnson Controls/Tyco merger, do you have to pay capital gains taxes on the fair market value of the shares before the merger, or just on the cash received? "

Really, the answer is "none of the above." You proceeds from the sale is the fair market value of the 231.4889 shares you received (277 x 0.8357) plus the cash received. From that you subtract the basis of your 277 shares.

I'm certain that the 1099-B is not listing as "proceeds" your original number of shares. Your original shares and all the shares acquired after that - dividend reinvestments? - constitute the basis of what you sold.

Tom Young