Now that April 15 looms, there's some discussion of the income tax treatment of the February IGEN/BIOV transaction on the Yahoo BIOV thread, for anyone who needs it, around message 48821 (can't get SI to take the link . . . ?)
It appears that the varous brokerage firms are showing this in a number of different ways. From my Schwab 1099 form, for example, you wouldn't learn that you received both cash and and BIOV shares in exchange for the IGEN shares, let alone that both pieces count as proceeds of sale for figuring your capital gain. Only the cash proceeds show up on the 1099.
Here's an excerpt from p. 69 of the BIOV prospectus:
"Accordingly, the transaction will result in the following U.S. Federal income tax consequences:
Each holder of IGEN common stock will recognize capital gain or loss, if any, equal to the difference between (1) the sum of the amount of cash received in the merger plus the fair market value of the BioVeris common stock received by such holder at the time of distribution of BioVeris common stock in
connection with the merger and (2) the holder's adjusted basis in the IGEN common stock immediately prior to the transaction.
- Such gain or loss will be capital gain or loss, and generally will be long-term capital gain or loss if the IGEN common stock exchanged in the transaction had been held for more than one year at the time of the transaction.
- The amount and character of gain or loss will be computed separately for each block of IGEN common stock that was purchased by the stockholder in the same transaction.
- The tax basis of the BioVeris common stock received by IGEN stockholders in the transaction will be equal to the fair market value of such stock at the time of the distribution of BioVeris common stock in connection with the merger.
- The holding period of the BioVeris common stock received by IGEN stockholders in the transaction will commence on the day after the distribution of BioVeris common stock in connection with the merger.
One reasonable method of determining the fair market value of the BioVeris common stock received by IGEN stockholders in the transaction would be to use the average of the high and low trading prices of BioVeris common stock on the first full day of trading following the distribution of BioVeris common stock in connection with the merger. Nevertheless, IGEN stockholders are urged to consult their own tax advisors regarding this matter." |
