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Biotech / Medical : Ligand (LGND) Breakout!
LGND 185.97-0.4%Feb 10 3:59 PM EST
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To: Andrew H who wrote (7663)9/25/1997 4:57:00 PM
From: lrb   of 32384
 
Thread:

I'd like to hear from someone who knows about the tax consequences
of the ALRIZ/ALRI/LGNDW split earlier this year, and of the
ALRI buyout. Specifically:

Suppose, for simplicity, that I bought 100 shares ALRIZ at $30/share
in September, 1996. In June, the investment was transformed into
100 shares of ALRI and 200 shares of LGNDW. Again for simplicity,
suppose that on November 3 I am paid $700 plus 80 shares of LGND for
my 100 shares of ALRI.

1. Is the June split of ALRIZ into LGNDW and ALRI a taxable event?
I.e., does the IRS believe I have realized income from this split?

2. How is my $3000 basis in my ALRIZ investment distributed between
my new ALRI and LGNDW holdings?

3. Is the November 3 buyback of ALRI a taxable event? Does the
IRS believe that I have realized $21.97 per share, or just the $7.00
per share that was paid in cash, with the remainder to be realized
when the LGND shares are sold?

For those of you who own ALRI in an IRA or 401K, aren't you glad
you don't have to ask these questions?
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