1099-B basis question

[JimTaxes]

I am stuck on this.. I am aware of basis... in general, cost + reinvested taxable dividends 

• This one 1099-B has 3 lots
• two show basis
• one is blank
• client called computershare; claimed they don't have to provide basis for the bigger, older lot sold
• stock is FirstMerit (FMER).. taken over by Huntington (HBAN)

my understanding is the following.. (I could have this wrong but this is the best that I can tell what took place)

• FMER shareholders would get HBAN shares and option to get $ 5.00 a share in add't HBAN shares of take cash for the $ 5.00 portion
• taxpayer inherited the shares in 2010 with 18.3275/share stepped up basis for a total of $ 32,395.95
• Client got her HBAN shares but took the cash part of the $ 5.00 /share
• the two lots with basis shown seem to be the shares acquired from reinvested dividends since taxpayer
• the lot with the missing basis shows proceeds of $ 9,277.07 (the original # of shares inherited times $ 5.00 a share)
• what do I show for the basis on this $ 5.00 cash tender
• taxpayer still has the new HBAN shares
• the reinvested dividends that resulted in more shares and the $ 5.00/share on those shares show basis on the 1099-B
• I don't think the basis is 1,762 times $ 5.00 because those FMER shares turned into HBAN shares AND $ 5.00 proceeds per share

I am kind of stuck on this. 

thank you

 

 

[JimTaxes]

the line that starts with  FMER shareholders   should read:

• FMER shareholders would get HBAN shares and option to get $ 5.00 a share in add't HBAN shares or take cash for the $ 5.00 portion

[jklcpa]

I googled to try to find the worksheets that are typically provided to stockholders when mergers occur. The FirstMerit/Huntington investor relations pages had only the tax filing and press release.

If I were you, I'd try googling each of the bank's names and look for the information in the investor relations area, or ask your client to provide the information that he or she should have received in a package of information describing the tax effects of the merger.

I did find this post by a CPA that talks about the merger and mentions the $5 per share with the merger to be completed in the fall of 2016 so I assumed this is the one you are referring to. Maybe you can match this blog post up with other documentation to determine if the facts presented in the blog are the same as your transaction.
http://www.schlabigcpa.com/income-tax-effect-on-the-cash-received-in-the-huntington-firstmerit-merger/