Q: Hi,
What is the CDN TIXT price per share from the merger between T & TIXT? How would this merger be recorded if someone had both stocks in their portfolio.
Txs
What is the CDN TIXT price per share from the merger between T & TIXT? How would this merger be recorded if someone had both stocks in their portfolio.
Txs
5i Research Answer:
It depends on what was selected when the shares were tendered. If cash and stock were received, the cash portion received for TIXT is taxable, but since TIXT declined so much most investors have a loss. If the shareholder receives a combination of shares and cash, the cash portion is treated as a taxable event. The shareholder calculates the capital gain (or loss) on the cash received by allocating the original cost basis proportionally between the shares and cash received and recognizing gain on the cash amount.
The new ACB of the acquired T shares can then be merged with the ACB of the old shares for the new 'total' ACB of all T shares.