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Technology Stocks : WDC/Sandisk Corporation
WDC 158.03+5.2%9:30 AM EST
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To: david1951 who wrote (60284)5/18/2016 11:55:31 AM
From: Art Bechhoefer1 Recommendation

Recommended By
david1951

   of 60323
 
David -- Now you raise another interesting question, whether the cost basis for your WDC shares can be traced to the original purchase of SNDK shares.

There are probably some tax questions here that will require a ruling by the companies involved, but it seems to me that, at the very least, the $67.50 cash received for each SNDK share will be considered a capital gain with cost basis whatever you paid for those shares. The WDC shares received in part payment for the SNDK shares may have a cost basis somewhere near $36. If the WDC shares received for the SNDK shares are considered simply as part payment on top of the $67.50, but the whole transaction is considered as a whole, not in its individual parts, then your original SNDK cost basis might prevail whenever you decide to sell the WDC shares. I don't believe it will work this way, as the IRS would definitely like to collect capital gain taxes at least on the cash portion. Maybe a tax attorney or a ruling requested by WDC would give us a better answer.

Art
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