Delawaredave5
Full time employment: Posting here.
- Joined
- Dec 22, 2004
- Messages
- 699
Public company A is doing a spin off exchange offer of one of its divisions and merging with public company B.
If you have shares of A, you can decide to have a portion of your shares exchanged at some conversion rate for shares in B.
Question: If you have a large unrealized gain in shares of A. is there a basis that's transferred over to shares you convert to B ?
So if you had $30k in A, cost basis of $15k, and you tender 1/3 of your shares converted to B is your new cost basis in B:
If there's a basis transfer. would the investment company holding shares calculate, track, pass a basis to new shares ? Or is that responsibility of person owning shares ?
As always, THANKS !
If you have shares of A, you can decide to have a portion of your shares exchanged at some conversion rate for shares in B.
Question: If you have a large unrealized gain in shares of A. is there a basis that's transferred over to shares you convert to B ?
So if you had $30k in A, cost basis of $15k, and you tender 1/3 of your shares converted to B is your new cost basis in B:
- The price of B holdings when converted ($10k) ?
- Cost basis of portion of A converted ($5k) ?
If there's a basis transfer. would the investment company holding shares calculate, track, pass a basis to new shares ? Or is that responsibility of person owning shares ?
As always, THANKS !