Is a stock swap for an acquisition a taxable event?

Forum|Forum|2 years ago
April 20, 2023
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When one company acquires another and their stock is used to acquire the shares in the company that I have stock in, is that a taxable event?

Not A Product Question

Best answer by robtm

When one company is acquired by another company the stock in the acquired company is not taxied until the new company stock is sold. The cost basis when the stock is sold is what you paid when you bought the original company stock (the acquired company).

robtmAnswer

Employee

DK3869Author

Thank you so much for the quick response. That is what I was thinking and other folks I spoke with said the same thing. My concern was my custodian that is holding my shares said it was a taxable event. My hope is they didn’t understand the question.

Critter-3

It may be a fully, partially or non taxable event depending on how the exchange was done. Please go to the company's website for their directions on this situation.