I am trying to review my taxes and have a mis-match between
BIVIO and my brokerage (BUY&HOLD). I had shares of
picturetel converted to polycom with an exchange of stock
plus cash. The cash amount is not coming out on the tax
forms. Should it be?

- Betty Darling

I also forgot the mention that the brokerage form calls it
"Proceeds from broker and barter exchange transactions
1099-B" and lists the amount under column 2 "Proceeds
(Net)." Bivio techs told me to enter the cash in "return
of capital". Is this classification is incorrect?

> I am trying to review my taxes and have a mis-match between
> BIVIO and my brokerage (BUY&HOLD). I had shares of
> picturetel converted to polycom with an exchange of stock
> plus cash. The cash amount is not coming out on the tax
> forms. Should it be?
>
> - Betty Darling

You should have received a document from either picturetel
or polycom explaining how to handle the conversion. If the
cash was just "cash in lieu" of a fractional share, then
that cash represents a sale. It is not "return of capital."
It should appear on Schedule D of Form 1065. The cost basis
of the sale is the appropriate fraction of your earliest
purchase of picturetel.

On the other hand, if you received stock+cash for each share
of picturetel, the treatment is different and you must refer
back to the documents to know what to do. If you don't have
them, they should be available on one of the two company's
web sites.

Ira Smilovitz

Elizabeth Darling wrote:
> I also forgot the mention that the brokerage form calls it
> "Proceeds from broker and barter exchange transactions
> 1099-B" and lists the amount under column 2 "Proceeds
> (Net)." Bivio techs told me to enter the cash in "return
> of capital". Is this classification is incorrect?
>
> > I am trying to review my taxes and have a mis-match between
> > BIVIO and my brokerage (BUY&HOLD). I had shares of
> > picturetel converted to polycom with an exchange of stock
> > plus cash. The cash amount is not coming out on the tax
> > forms. Should it be?
> >
> > - Betty Darling

Ira Smilovitz wrote:
> > On the other hand, if you received stock+cash for each share
> of picturetel, the treatment is different and you must refer
> back to the documents to know what to do. If you don't have
> them, they should be available on one of the two company's
> web sites.
>

It was a "Cash&Stock Merger" transaction, according to
Buy&Hold's monthy statements. Does anyone know how to enter
this correctly in BIVIO? I was told to enter a "return of
capital" for the cash part, which seems wrong. Also,
would the cash part of this be taxable income? I assume
so, but it is not showing on the tax forms the way it is
currently entered.
- Betty Darling

It might help if you identified the companies involved.

Ira Smilovitz

Elizabeth Darling wrote:
> Ira Smilovitz wrote:
> > > On the other hand, if you received stock+cash for each share
> > of picturetel, the treatment is different and you must refer
> > back to the documents to know what to do. If you don't have
> > them, they should be available on one of the two company's
> > web sites.
> >
>
> It was a "Cash&Stock Merger" transaction, according to
> Buy&Hold's monthy statements. Does anyone know how to enter
> this correctly in BIVIO? I was told to enter a "return of
> capital" for the cash part, which seems wrong. Also,
> would the cash part of this be taxable income? I assume
> so, but it is not showing on the tax forms the way it is
> currently entered.
> - Betty Darling

Elizabeth Darling wrote:
> I had shares of
> picturetel converted to polycom with an exchange of stock
> plus cash. The cash amount is not coming out on the tax
> forms. Should it be?
 
According to a CPA, the PCTL/PLCM merger should be entered as a sale
of PCTL, followed by a purchase of PLCM. The sale price would be 1
PCTL share = $3.11 + 0.1177 share of Polycom x the average stock price
on the date of transfer.
 
For example, if you owned 100 shares of PCTL which was transferred to
PLCM on 10/12/01, you would enter a sale of PCTL with a sales price of
$703.76 (100 x (3.11 + (0.1177 x 33.37))), using a closing price for
PLCM on 10/12/2001 of $33.37.
 
Then enter a purchase of PLCM using the stock portion (don't include
the cash), (100 x (.1177 x 33.37)) = $392.77 for the shares received
from the acquisition. More information about the merger is available
on Polycom's website.
 
http://199.230.26.96/plcm/picaq.shtml
 
Paul Moeller
bivio Inc.