Is Cash Received in a Merger Taxable?
The 1099-B lists the proceeds of the sale, and it is then up to you to compute the proper capital gain or loss. Download Schedule D from the IRS website if you have a capital gain or loss to report.
How does exchange ratio work in all stock mergers?
In an “all stock” merger, the exchange ratio can result in a fraction of a share being owed to the owner of stock in the acquired company. Rather than issue a portion of a share, the investor is paid “cash in lieu” of a fractional share. These payments are always small and less than the market value of one share.
How to calculate cost basis after a merger?
Subtract the result in the previous step from the total number of shares of the original acquired company stock you own, then multiply by your original cost basis per share, to get the cost basis for the cash portion of the merger.
