On July 24, 2015, ATT (T) completed a purchase of DirectTV (DTV). If your investment club owned DTV, you received T stock plus some cash for your DTV shares. This type of buyout is called "non-taxable", because you don't owe gain on the difference between the entire value of the stock plus cash that you received and your cost basis in DTV. However, it is not completely non-taxable as you may have a gain to report because of the cash you received.
The logic behind tax terminology is sometimes baffling. The entries to record this type of transaction are more involved than just entering a straight stock for stock merger. Fortunately, we will help you make them. If you use AccountSync and your broker has provided the details, we enter them automatically. If you don't see this has happened or you don't use AccountSync, feel free to email us at support@bivio.com and we'll be glad to make them for you. Once entries have been made, it is important that you check that the cost basis of each of your new T lots agrees with what your broker shows.
There is a judgement made about T "Fair value" on the date of the merger that establishes the accounting entries you need. There are several correct methods that can be used to make this judgement. You'll probably want to use the one your broker uses. Unfortunately, the company hasn't published any guidelines yet and we don't have a way to know what your particular broker used.
Fortunately, if the cost basis in bivio doesn't agree with what your broker shows, we can "tweak" your entries to use their parameters. That will save you time matching cost basis on your taxes when you eventually sell your shares. It will also make sure that the capital gain you need to report for 2015 will agree with what they will report on their 1099.
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