Our Club owns shares of GSB. We have never been involved in
a buyout before.
When we receive the shares of C, do we own them from the 1st
date we bought GSB or the date of the buyout?
We did the SSG on Citibank. If we decide to keep Citibank,
would it be best to sell GSB at or around $40 per-share and
then buy Citibank on a low, or let them give us the new
shares of C at the price on the day of the takeover?

Thank you for your help.

Sam

Sam,

It all depends on the terms of the merger. If it's a
straight trade of shares of C for shares of GSB (with or
without a cash "boot"), then your holding period for C will
coincide exactly with the holding period for the GSB shares
(on a lot by lot basis). Your cost basis may be adjusted to
account for the cash component.

If it's a cash only deal, then you will have sold your GSB
on the date of the merger for the cash you receive.

There are also other hybrid possibilities.

The decision to sell GSB and buy C is an investment one that
your club will have to make. The only advice that I would
give you is to remember that if you sell GSB now, you are
creating a capital gain or loss that will be included on
this year's tax return. If you hold through the merger, you
"may" defer recognition of the gain/loss if the deal is
structured appropriately.

Ira Smilovitz
Sam Anastasio wrote:
> Our Club owns shares of GSB. We have never been involved in
> a buyout before.
> When we receive the shares of C, do we own them from the 1st
> date we bought GSB or the date of the buyout?
> We did the SSG on Citibank. If we decide to keep Citibank,
> would it be best to sell GSB at or around $40 per-share and
> then buy Citibank on a low, or let them give us the new
> shares of C at the price on the day of the takeover?
>
> Thank you for your help.
>
> Sam