club_cafe: Stock name changes

iras1 on

In a message dated 11/13/2006 10:15:00 A.M. Eastern Standard Time, sandy_starr@bivio.com writes:

One final question, I hope! We have two situtations where
we have received a new stock and Ameritrade has charged us
$20.00 for a mandatory reorganizational fee. Anonyx became
TPTX which created a $20.00 fee, I presume because it is a
new symbol to the stock market. Then Agilent spun off
Verigy which is also a new stock and we got another
mandatory reorganization charge from Ameritrade. Do these
charges become part of the cost of the stock like a
commission or are they just expenses. I assumed they were
general expenses, but I am not sure. Do all brokerages
charge for new stock or is this an Ameritrade rip-off?

Many brokers charge similar fees. They should be recorded as a NEGATIVE Return of Capital from the surviving or new company. It is equivalent to paying a commission on the transaction as it adds to the cost basis of the new shares. This is not a current expense but will reduce the capital gain when the shares are sold.

Ira Smilovitz.

Phil and Sandy Starr on

In Bivio, how exactly do I do this?

----- Original Message -----

From: IraS1@aol.com

To: club_cafe@bivio.com

Sent: Monday, November 13, 2006 12:12 PM

Subject: Re: club_cafe: Stock name changes

In a message dated 11/13/2006 10:15:00 A.M. Eastern Standard Time, sandy_starr@bivio.com writes:

One final question, I hope! We have two situtations where
we have received a new stock and Ameritrade has charged us
$20.00 for a mandatory reorganizational fee. Anonyx became
TPTX which created a $20.00 fee, I presume because it is a
new symbol to the stock market. Then Agilent spun off
Verigy which is also a new stock and we got another
mandatory reorganization charge from Ameritrade. Do these
charges become part of the cost of the stock like a
commission or are they just expenses. I assumed they were
general expenses, but I am not sure. Do all brokerages
charge for new stock or is this an Ameritrade rip-off?

Many brokers charge similar fees. They should be recorded as a NEGATIVE Return of Capital from the surviving or new company. It is equivalent to paying a commission on the transaction as it adds to the cost basis of the new shares. This is not a current expense but will reduce the capital gain when the shares are sold.

Ira Smilovitz.

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