Capital gains

Forum|Forum|3 years ago
June 2, 2022
1 reply
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Will I have to pay capital gains on the cash that will be paid to me when one of my stocks merges with another company. I will also receive a percentage of the new company stock. Will I be free to spend the money without a capital gain implication

Mike9241

the cash is boot and will be taxable as a capital gain - short-term or long-term depending on your holding period for the original stock. only the companies can answer the question as to whether the stock for stock portion is taxable or tax-free. that should be in the documents the companies should be sending you about the merger. if not call investor relations for the companies.

whether you actually have to pay capital gain tax is a different issue. it depends on the $ amount of capital gains and your other income for the year. could be taxed a 0% or more than 20%

state laws may be different.