My wife received a check for a cash entitlement on exchanged shares in connection with a merger. How do I report that on my income tax form?

[ErnieS0 · Accepted solution]

It depends on what the check was for.

If the cash was received in exchange for stock owned by your wife, you would report that as a sale of stock. You will need TurboTax Premier for a stock sale.

If it's a small amount, you can choose to pay tax on the entire amount and report it as Other Income. Here's how:

1. Click Federal in the left column
2. Click Wages & Income at the top
3. Scroll down to Less Common Income
4. Start Miscellaneous Income, 1099-A, 1099-C
5. Start Other reportable income
6. Say Yes to Any Other Taxable Income?
7. Enter a Description and Amount

An acquiring company may pay cash in exchange for company stock owned by your wife.

Sometimes this is for the full amount. Other times, it's for fractional shares.

For example, if your wife owned 100.25 shares of the old stock, the new company might exchange that for 100 shares of new stock and pay the .25 shares in cash.

[pdelphey]

Thank you, Ernie - very helpful!