Nokia Alcatel Merger Form 1099B Question

[syltan]

Do not have the cost basis going back to Lucent/Alcatel.

I just received 1099B. I am ok with cash in lieu which they marked as "A" short term, but such small amount so I am not concerned.

However, do not understand why I have to report the shares which I still have.  It says: Your Fair Market Value of ...shares of SPONSORED ADR @ 7.366 on 07 Jan 2016 and totaling $.... will be reported to the IRS as follows:

Form 8949  has "X", (1c) Date sold 01/07/2016, (1d) Proceeds $..... and (5) checked for Noncovered security. The way I entered it,  I owe taxes on it. I read in another answer that it was supposed to be tax free exchange???

[dvaldes66]

I had the same situation. I spoke to Citibank and they said it is a taxable event, as it is anot exchange, not a merger. I then spoke to a CPA, he confirmed it is a taxable event. Will need your cost basis from when you purchased either Alcatel or lucent to calculate the gain or loss. 

[maglib]

yes the F-4 confirms its a sale and the new shares get the market value on the 1099B.  You basically sold ALU ADR's and got stock instead in Nokia...  Strangely you can even take the losses.  Your new holding period is 1/2016 too....

[Edge10]

If the cost basis originates from a premerger Lucent or ALU purchase can you take the loss again when you sell the NOK?  Do you calculate the cost basis of Nokia shares when they are sold by the original purchase of the $ ALU  and ALU = .55 NOK shares?

[maglib]

@Edge10 your basis needed to be allocated to each event and each spin off.  Here is some assistance to allocate basis
https://networks.nokia.com/investors/tax-basis-worksheets.

Here is everything from 2000 onward, you can use above link for pre 2000:
purchase 1998


Avaya Spin Off (.94524 basis to Lucent) 10/2/2000
.05476 basis to Avaya


Agere Spin Off class A and  Class B for Lucent 6/3/2002
Lucent 81.7445 of basis
Agere A .7136 of basis
Agere B 17.5419 of basis

Alcatel Merger @.1952 shares no change in basis, just change of shares 12/1/2006  
shares in new company 12/1/2006
CIL


NOKIA squeeze out 2016
get .55 shares NOKIA stock
F-4 says take losses
shares sold  full basis to take loss vs. value of any Nokia you may have gotten.  The value of Nokia received becomes basis and new holding period for Nokia shares.

[Edge10]

Thank you for the helpful info.  I have three sources of the LU - ALU shares.  1) Straight Broker Purchase,  2) Non-qualified LU options,  and 3) ESPP.  The NQ options were mixed with the straight Broker Purchase after NOK merger.  I have all purchase and NQ option records, but does does the stock mix matter ? Any way to carry-forward /credit tax on original option purchase based on grant to market value ? Or is my loss only based on grant value now ?   Is there any help in TT premier with ESPP several purchases in a time period  ?

[tdowd222]

How do I calculate the cost basis from a premerger lucent-alcatel share to nokia