Takeda Shire merger - 1099-B
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Level 2

Takeda Shire merger - 1099-B

For the Takeda-Shire merger, I was give cash + Takeda ADS, for each Shire ADS I owned. I was issued a 1099-B from Brokerage A, in which the "Proceeds" reported sum of (1) Cash for Shire ADS and (2) and cash from sale of fractional Takeda ADS newly issued due to this merger. 

 

I have Shire ADS with another brokerage (Brokerage B). The way Brokerage B reported the "Proceeds" for the Takeda-Shire merger is different. Brokerage B reported sum of (1) Cash for Shire ADS and (2) FMV of Takeda ADS newly issued due to this merger. 

 

Since there are different methods of reporting from Brokerage A and B, I am not sure which is correct. Can anyone confirm or provide input? Both brokerages say they are correct in their method....

4 Replies
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Level 12

Takeda Shire merger - 1099-B

By all accounts this was a fully taxable merger where the "proceeds" to use for gain or loss is the sum of the cash received and the FMV of the Takeda stock received, (including the fraction that was then sold in the CIL transaction).  So I'd say the brokerage that reported the cash plus stock is honoring that, and probably is correct.

 

But if the 2nd brokerage insists that they are correct, then I'd simply go with their number.  On a piece of paper or in Excel or however else you might make the calculation, document a gain or loss using the cash plus FMV of stock number as your proceeds.  Then, given that you now know your gain or loss, in your income tax return enter the proceeds shown on the 2nd 1099-B and derive a basis figure that gives you the correct gain or loss.  Keep the documentation you created with your "as filed" income tax return just in case the IRS ever comes calling.  If you have a correct gain or loss figure on your second sale you have fulfilled your obligation as a taxpayer and have nothing to worry about.

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Level 2

Takeda Shire merger - 1099-B

Thank you!

Another difference in method/approach to reporting the Proceeds related to this merger:

Brokerage A have Box 7 checked

Brokerage B does not have Box 7 checked

 

Box 7 of form 1099-B says "If checked, you cannot take a loss on your tax return based on gross proceeds from a reportable change in control or capital structure reported in box 1d". 

 

Is Box 7 supposed to be checked?

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Level 12

Takeda Shire merger - 1099-B

Who are these two brokers?

 

As a "fully taxable" merger that means gains and losses are allowed.  Box 7 checked would indicate that this was a more "typical" cash plus stock transaction where gains are allowed, to the lesser of "economic" gain or cash received, but losses are not, all calculated on a lot by lot basis.

 

Guidance provided by Takeda per costbasis.com: https://www.costbasistools.com/taxstmts/ShireTakeda.pdf

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Level 2

Takeda Shire merger - 1099-B

Thanks for the input! 

They are EquaTex and Citibank.

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