club_cafe: I need help with Scottish Power

iras1 on

In a message dated 7/27/2007 9:43:57 P.M. Eastern Daylight Time, NOELLETS1@msn.com writes:

Thank you for your reply Ira. Let me see if I have this straight. These are approximate numbers I'm using. Originally, I had 128 shares of Scottish Power with a cost basis of $12,000. I received $6000 for the Scottish Power, plus 120 shares of Iberdrola (which I will look up the value of them on the day they were received). So I would treat the sum of these two items as the sale price. Then, my basis in the Iberdrola is the value on the day they were received. I hope I got that right, because it's starting to make sense to me.

That's what I intended. I'm relying on the following document, http://www.iberdrola.es/wcorp/gc/en/doc/jga2007SchemeDocument.pdf, specifically, page 68..

Among other things noted in the document, the Iberdrola ADS shares will only trade in the Over The Counter market. This will make it much more difficult to sell the shares.

I note that there are some peculiar Spanish tax considerations if you, or any of your club members have certain business/financial connections to Spain.

Additionally, you will have to pay a Spanish Wealth Tax (Form D-714) each year if you own the shares on December 31 (see page 62). The tax will be based on the average value in the 4th quarter as determined by the Spanish Ministry of Finance.

Specific US information can be found on pages 67 and following.

Ira Smilovitz

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