I had a bank stock that merged with another bank in 2004. I sold some shares of the new bank in 2013. Is the cost basis determined by the cost of the original bank or the new one?

Banc one was the original bank stock purchased in Feb., 1997. Banc one was purchased by JP Morgan in July 2004. I sold some shares of JPM in 2013. How is the cost basis determined?


Since this was a non-taxable stock for stock merger your basis and holding period carries over to the new stock.  So if you had 100 shares of Bank One with a basis of $10,000, then immediately after the merger you'd have 132 shares of JP Morgan with a basis of $10,000.  Of course if anything has happened subsequent to the merger to affect your basis in JP Morgan - stock splits, spin offs, other mergers, etc. - you'd have to take that into account too in determining the basis of the JP Morgan stock you sold in 2013.

Tom Young

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