[GNC] Merger

[Les]

Thanks John,

That makes very good sense. I really appreciate you assistance.

Les

On 7/30/19 4:05 PM, John Ralls wrote:
>
>> On Jul 30, 2019, at 12:03 PM, Les <lelliott5 at gmail.com> wrote:
>>
>> Hi John, thanks for the reply.  I guess I omitted the fact that the existing stock had a different name (symbol) that the new stock.  So is this more of a transfer?
>>
>> Thanks,
>>
>> On 7/30/19 1:41 PM, John Ralls wrote:
>>>> On Jul 30, 2019, at 11:05 AM, Les <lelliott5 at gmail.com> wrote:
>>>>
>>>> Hi all:
>>>>
>>>> I had a merger transaction on one of my Canadian stocks where my existing holding was acquired on a 33 for 20 basis (new for old). From 500 of the existing shares for 825 shares of the new.  I also had a net gain in cash of C$16.75.
>>>>
>>>> I am uncertain on how to handle this transaction in GC.
>>>>
>>>> I would greatly appreciate any suggestions.
>>> Actions>Stock Split.... Add 325 shares and book a "cash in lieu" for the C$16.75.
> Les,
>
> What I do in that case is modify the transaction after running the Stock Split Assistant to credit the old stock account 500 shares and change the 325 debit to 825 in the new stock account. You could of course create the same transaction manually:
>
> Old Stock                   -500
> New Stock                   825
> Cash Account                                         16.75
> Cap Gains Income                                                  16.75
>
> Start it in the Old Stock account and be sure that the price column is blank in all 4 splits.
>
> Note that this treatment depends on the merger not being taxable to the shareholders. That's true in nearly all cases, but a prominent one in the works now that isn't is United Technology's merger with Raytheon. If it's a taxable merger you need to record a regular sell of the 500 shares of "old stock" and a buy of the 800 shares of "new stock". The C$16.75 gets tacked on to the sell transaction. You should have gotten a letter from the company indicating the price to use for each transaction. If you didn't you can use the closing price of each on the last trading day before the merger consummated. (Note that I'm not a licensed accountant, financial advisor, or tax advisor and that you should consult with licensed professionals to be sure that what I've suggested complies with tax law in your jurisdiction.)
>
> Regards,
> John Ralls