Capital Gains and Losses
Questions and comments about tax rules for buying and selling stocks, mutual funds, real estate and other assets.
ALU- NOK Stock Sale or Merger?
Posted by: edge, March 16, 2017 01:23AM
In 2016 I owned Alcatel-Lucent stock and supposedly a merger occurred with Nokia in 2016. However, both of my 1099-B show a stock sale with proceeds. In addition, a credit of Nokia stock at the exchange rate of .55 NOK = 1 ALU share at the then current market price.

The stock was acquired in several ways. Purchased through a broker 1999, Non qualified stock options in 2000 (yes I probably should have exercised them at the time), and Employee stock purchase plan. The purchased share and Options were combined by broker E during the merger. Broker C holds all of the ESPP shares.

Is this transaction considered a sale of my stock rather than exchange? If so, what is the correct way to calculate cap gain losses. I currently have only $2000 in income, so carry forward losses is an issue. Can any tax carry forward credits be claimed on the NQ options ?
? Is there a problem with Broker E blending my purchased and option shares?

Re: ALU- NOK Stock Sale or Merger?
Posted by: kaneohe, March 16, 2017 02:40AM

The merger was expected to be a fully taxable transaction so it was as if you sold your ALU shares and bought NOK. Basically your basis is what you bought them for and the sales price is what you sold them for
(what the NOK was worth when you acquired it).

If your income is low enough, you may lose only part or perhaps even none of the 3K loss allowed each yr.
You need to go thru the capital loss carryover wksht.

Sorry, only registered users may post in this forum.