Ira, this explanation was very helpful to me in trying to
figure out how to handle the Nextel/Sprint payment we
received from the merger.  I followed your step by step
instructions and was able to figure out that our 36.79
payment should be classified as a capital gain distribution,
but there were no instructions for determining which portion
is long-term and which is short-term. Some of our stock was
held for over a year and different amounts were bought and
sold within a year. I could really use your advice.

You need to go through the procedure for each block of shares separately. If the shares were held long-term at the time of the merger, any capital gain will be long-term capital gain. If the shares were held short-term, then that capital gain will be short-term.

 

Ira Smilovitz