IBM/Kyndryl split

The following was obtained from the Information Statement from Kyndryl Holdings, Inc. at page 123:

• Cash in Lieu of Fractional Shares
• If a U.S. Holder receives cash in lieu of a fractional share of common stock as part of the Distribution, the U.S. Holder will be treated as though it first received a distribution of the fractional share in the Distribution and then sold it for the amount of cash actually received. Provided the fractional share is considered to be held as a capital asset on the date of the Distribution, the U.S. Holder will generally recognize capital gain or loss measured by the difference between the cash received for such fractional share and the U.S. Holder’s tax basis in that fractional share, as determined above. Such capital gain or loss will be long-term capital gain or loss if the U.S. Holder’s holding period for the IBM common stock is more than one year on the date of the Distribution.

Based on the above, you need to determine your cost basis in the fractional share you received.  Here is a link to the Information Statement from which the above material was obtained.

Information Statement

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