Thanks John,
That makes very good sense. I really appreciate you assistance.
Les
On 7/30/19 4:05 PM, John Ralls wrote:
On Jul 30, 2019, at 12:03 PM, Les <lellio...@gmail.com> wrote:
Hi John, thanks for the reply. I guess I omitted the fact that the existing
stock had a different name (symbol) that the new stock. So is this more of a
transfer?
Thanks,
On 7/30/19 1:41 PM, John Ralls wrote:
On Jul 30, 2019, at 11:05 AM, Les <lellio...@gmail.com> wrote:
Hi all:
I had a merger transaction on one of my Canadian stocks where my existing
holding was acquired on a 33 for 20 basis (new for old). From 500 of the
existing shares for 825 shares of the new. I also had a net gain in cash of
C$16.75.
I am uncertain on how to handle this transaction in GC.
I would greatly appreciate any suggestions.
Actions>Stock Split.... Add 325 shares and book a "cash in lieu" for the
C$16.75.
Les,
What I do in that case is modify the transaction after running the Stock Split
Assistant to credit the old stock account 500 shares and change the 325 debit
to 825 in the new stock account. You could of course create the same
transaction manually:
Old Stock -500
New Stock 825
Cash Account 16.75
Cap Gains Income 16.75
Start it in the Old Stock account and be sure that the price column is blank in
all 4 splits.
Note that this treatment depends on the merger not being taxable to the shareholders. That's true
in nearly all cases, but a prominent one in the works now that isn't is United Technology's merger
with Raytheon. If it's a taxable merger you need to record a regular sell of the 500 shares of
"old stock" and a buy of the 800 shares of "new stock". The C$16.75 gets tacked
on to the sell transaction. You should have gotten a letter from the company indicating the price
to use for each transaction. If you didn't you can use the closing price of each on the last
trading day before the merger consummated. (Note that I'm not a licensed accountant, financial
advisor, or tax advisor and that you should consult with licensed professionals to be sure that
what I've suggested complies with tax law in your jurisdiction.)
Regards,
John Ralls
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