Here's the registration statement regarding the US income tax effect of the merger on US shareholders:
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A U.S. holder receiving Enbridge common shares in exchange for Spectra
Energy common stock pursuant to the merger will not recognize any gain
or loss, except for any gain or loss that may result from the receipt by
such U.S. holder of cash in lieu of fractional Enbridge common shares
(as discussed below). The U.S. holder’s aggregate tax basis in the
Enbridge common shares received in
the merger (including any fractional Enbridge common shares deemed
received and redeemed as described below) will be equal to the U.S.
holder’s aggregate tax basis in the Spectra Energy common stock
surrendered, and the U.S. holder’s
holding period for the Enbridge common shares received in the merger
(including any fractional Enbridge common shares deemed received and
redeemed as described below) will include the U.S. holder’s holding
period of the Spectra Energy common
stock surrendered. me tax effect on US shareholders:
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When US companies merge exchanging stock for stock in a tax-free reorganization there are no income tax reporting requirements as to the merger itself. I believe that will be the case here, too.
The only US reporting obligation in this case is to report the sale of the fractional share and any resulting gain or loss.
You'd use the "Stocks, Mutual Funds, Bonds, Other" interview and tell TurboTax no 1099-B was received. The date you acquired the fractional share would be the same date you acquired the Spectra Energy Co. stock. Your basis in the fractional share is:
(Basis in Spectra Energy Co. stock) divided by (TOTAL number of Enbridge shares received, including the fraction) times (fraction of a share received).
Your basis in the Enbridge stock after the sale is your original basis in Spectra minus the basis used up in the sale of the fractional share.
Tom Young
