Need tax basis caused by spinnoff, Chapter 11, merger, and sale.
I owned Southern Co stock and from a 04/02/2001 spinoff received 271 shares of Mirant Corp stock @ $14.50/sh. On 01/03/2006 Mirant emerged from Chapter 11. At that time the "old" Mirant stock was canceled and "new" Mirant stock was issued at rate of 0.027100875 shares per 1 old Mirant share, which gave me 7 shares of new Mirant stock.
On 09/13/2010 Mirant Corp and RRI Energy merged and has become GenOn Energy. From the merger I received 2.835 shares of RRI stock for each share of my Mirant stock, which gave me 19 shares of GenOn stock, which I sold on 12/20/2010 and netted $52.26 on the sale.
How to I calculate tax basis on this? Do I have a Long Term Loss based on my original Mirant value of $$3,931(+/-)? Thanks...
Comment on AtlantaTaxExpert's post
Thanks a lot and I will check on what you mentioned.
Comment on ebaines's post
I just want to verify that when the "old" Mirant stock was and the "new" Mirant stock was issued, that it does not affect the original basis of the Mirant stock by going through the Chapter 11 process? Thanks for your help.