Didn't see any mention of this here, but at the beginning of August a court ruled on the taxability of shares gained through the demutualization of an insurance company.
Up until that decision, the IRS ruled that the cost basis of such shares is 0, therefore when the shares were sold the entire proceeds would be subject to long-term capital gains.
The decision sets the basis of the shares to be the original stock price on the day of the demutualization.
I am familiar with the Prudential demutualization. The shares were issued at $27.50. Today's closing price was over triple that. Being able to exclude that $27.50 from taxation can be significant.
The decision is at: http://www.uscfc.uscourts.gov/sites/default/files/ALLEGRA.Fisher080608.pdf
The IRS is deciding whether to appeal.
Up until that decision, the IRS ruled that the cost basis of such shares is 0, therefore when the shares were sold the entire proceeds would be subject to long-term capital gains.
The decision sets the basis of the shares to be the original stock price on the day of the demutualization.
I am familiar with the Prudential demutualization. The shares were issued at $27.50. Today's closing price was over triple that. Being able to exclude that $27.50 from taxation can be significant.
The decision is at: http://www.uscfc.uscourts.gov/sites/default/files/ALLEGRA.Fisher080608.pdf
The IRS is deciding whether to appeal.