Our club had 100 shares of Caesar's Resorts which merged
with Harrah's on June 20, 2005. In exchange for our 100
shares of Caesar's, we acquired $568 plus 22 shares of
Harrah's. I recorded the merger, but, there wasn't any
place to indicate the cash that was received. Anyone know
how to handle this? Thanks. Joann

You should delete your merger entry. The correct treatment will depend
on whether or not you incurred a gain or a loss on the transaction. You
should have received information from the companies involved on the
correct tax treatment and the fair market value of the shares of Harrah
received.

In general, the total consideration will be the sum of $568 plus the
fair market value of the 22 shares of Harrah's. If this total
consideration is more than your tax basis in Caesar's, you will be
reporting capital gain to the extent of such excess. So you would record
a sale of Caesars for the total consideration, and then record the
purchase of the 22 shares at the fair market value.

If the total consideration is less than your basis in Caesar's you will
have suffered a loss, but you may not record it as such. Instead, you
record the cash received as a return of capital, and then record the
merger.

Again, you should await information from the companies involved, if you
haven't received such information already.

Rip West
Saint Paul, MN