Provided the merger qualifies as a “reorganization” within the meaning of Section 368(a) of the Code, the material U.S. federal income tax consequences of the merger to U.S. holders will be as follows:
Exchange of Shares of Viacom Common Stock for Shares of ViacomCBS Common Stock
U.S. holders who exchange their shares of Viacom common stock for shares of ViacomCBS common stock will not recognize any gain or loss for U.S. federal income tax purposes, except with respect to cash.
A U.S. holder who receives cash in lieu of a fractional share of ViacomCBS common stock will be treated as having received such fractional share in the merger and then as having sold such fractional share to CBS for cash. As a result, a U.S. holder generally will recognize capital gain or loss equal to the difference, if any, between the amount of cash received and the tax basis in such fractional share (determined as described above). Any gain or loss recognized generally will be long-term capital gain or loss if, as of the effective date, the shares of Viacom common stock surrendered in exchange for such fractional share were held for more than one year and otherwise will constitute short-term capital gain or loss. The deductibility of capital losses is subject to limitations.
THERE IS NOTHING TO REPORT AS FOR THE MERGER ITSELF. CASH FOR FRACTIONAL SHARES IS REPORTED ON SCHEDULE D THROUGH FORM 8949 OR 1099b WORKSHEET. MANY TAXPAYERS DO NOT ASSIGN COST BASIS TO FRACTIONAL SHARES BUT YOU CAN
YOUR COST BASIS IN THE STOCK DIVIDED BY TOTAL SHARES RECEIVED IN MERGER INCLUDING FRACTIONAL SHARE TIMES FRACTIONAL SHARE (AS A DECIMAL).
EXAMPLE .5000(TOTAL COST BASIS IN STOCK) / 250.5 (SHARES RECEIVED IN MERGER)= 19.96 PER SHARE TIMES .5 SHARES SOLD = 9.98
REMAINING BASIS 4990.20 REMAINING SHARES 250 AVERAGE COST = 19.96