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Returning Member
posted Apr 26, 2022 10:32:47 PM

Stock basis after a company acquisition

I know that I generally need to keep lots of stock acquired at different times separate for purposes of computing their basis.  My question is whether it is ok to recombine two lots under the following circumstance:  I owned 100 shares of Company A acquired in 1998 for $33/share, and 50 shares of Co. A acquired in 1999 for $24/share.  In 2001, company B acquired A, and holders of Co. A shares received 1.5 shares of B for each share of A.  I then owned a total of 225 shares of B.  150 of those shares have a basis of $33/1.5=$22/share.  75 of those shares have a basis of $24/1.5=$16/share.  Given that all of my Co. B shares were acquired in the same transaction, can I simplify things and consider the basis of all 225 shares to be (150x22 + 75x16)/225 = $20/share? 

 

Many thanks.

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2 Replies
Level 15
Apr 26, 2022 10:45:02 PM

in a tax-free merger/acquisition tax basis carried over so you have two lots each with its own tax basis. 

Returning Member
Apr 27, 2022 11:18:48 AM

Thanks for your reply.  I know I have two separate lots.  But my question was, am I *allowed* to combine them under these circumstances?