On 12-1-04 there was a reorganization and name change for
Wellpoint as described in my Subject line above.

On our brokerage account it shows we sold our 60 shares for
$23.80 per share. We were also charged a Reorganization Fee
of $20.00? The stock symbol is still the same (WLP) and we
still have 60 shares. I checked the Investor Relations
heading on Wellpoint's web site and found nothing.

How would I account for all this?

Could anyone do well and point this out for me?

Thanks,

Mike Roth
Gekko Worldwide Partners

Mike Roth wrote:
> On our brokerage account it shows we sold our 60 shares for
> $23.80 per share. We were also charged a Reorganization Fee
> of $20.00? The stock symbol is still the same (WLP) and we
> still have 60 shares.
 
Wellpoint Health Networks Inc merged with Anthem, Inc on 11/30/04 and
Anthem changed its name to WellPoint, Inc and its ticker to WLP.
 
Below is a document from the Wellpoint website with information about
the taxable status of the merger.
 
http://media.corporate-ir.net/media_files/IROL/13/130104/corpgov1/Tax_QA.pdf
 
First record this transaction as a merger. Select the 'transactions'
link next to the stock on the Accounting / Investments page and enter
a merger for an equal number of WLP shares. Leave the 'Cash Received'
field blank.
 
https://www.bivio.com/my-club-site/accounting/investments
 
According to the document above, the taxable gain is the lesser of
cash received or difference in value of the cash and stock received
and the club's current share basis.
 
For example, if your club owned 50 shares of Wellpoint with a cost
basis of $5000, and your received 50 shares of WLP + $23.80/share,
then the figures would be:
 
WLP value 11/30/04 $101.33
 
cash value: (50 * 23.80) = $1190
basis difference: (50 * 101.33 + 1190) - 5000 = $1256.50
 
So the lesser value, $1190, would be considered the taxable gain. You
would enter this as an income entry for Long Term or Short Term gain
depending on how long you held the original shares.
 
If the club's basis in the stock was $6000, then the figures would be:
 
cash value: $1190
basis difference: (50 * 101.33 + 1190) - 6000 = $256.50
 
In this case, the $256.50 would be the taxable gain. This can be
recorded in two parts, first as a Return of Capital income entry for
$933.50 and then as a Short or Long Term gain entry for $256.50.
 
Paul Moeller
bivio Inc.