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Technology Stocks : Lucent Technologies (LU)
LU 2.495-2.5%10:45 AM EST
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To: sylvester80 who wrote (16318)9/27/2000 10:31:36 AM
From: Georgeb  Read Replies (2) of 21876
 
Regarding your Questions on the Avaya spinoff shares:

Question #1: If your Lucent shares are long term capital gain shares (holding 12+ months), what are your Avaya shares considered for tax purposes?
Long term or short term?

According to the rules of a stock purchase plan brochure that I have, AV shares have the same grant date and purchase date as the LU stock to which they relate. The cost basis is allocated between them. Your AV shares would appear to be a long term capital gain.

Question #2: When you decide to sell your Avaya shares, what would be your cost basis and date of purchase? $0?

Cost basis is allocated between the LU stock and the related AV stock. See the answer above. The spinoff price on monday will start at about 19.75 a share for AV. Taking into account the 12:1 divident ratio, I would guess that makes AV
worth about 1/24th of your purchase price if you bought LU at $42.

Question #3: Let's say some of your lucent shares are long term, some are short term? What are your Avaya shares then?

They are the same as their related LU stock (in the same proportion of long term vs short term.

I am not an accountant, so check this with a professional so you dont end up in jail for tax evasion.
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