GE Wabco Merger

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sport
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GE Wabco Merger

Post by sport »

We have a small holding in GE that was inherited many years ago. We are mutual fund investors and are not well versed in the pitfalls of holding individual stocks. So, we have not paid a lot of attention to the GE stock as it is the only individual stock we hold. Unfortunately, we rode it all the way down. Today, we received a prospectus that describes a merger of a GE division with a division of Wabco (Westinghouse Air Brake Co.). As part of that merger, there will be a spinoff of stock to GE shareholders. The amounts apparently are small. The prospectus is 135 pages of small print, with a 45 page appendix. As I understand it, GE shareholders will receive shares of "Spinco". This is a stock that cannot be traded. The Spinco shares will then be sold in exchange for shares of Wabco. They project 1.85 shares of Wabco for each 100 shares of GE. Of course, there are tax consequences to all of this. The merger is scheduled for February 27, 2019. (Thanks for all the advance notice.) :annoyed With the drastic cut in the GE dividend, and now this complication of our tax situation, I am inclined to sell the stock on Monday morning. It just seems to be more trouble than its worth to own it. The GE stock was originally purchased a very long time ago, so the cost basis is low, perhaps a little more than the current price. Is there any reason to keep this stock?
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tainted-meat
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Re: GE Wabco Merger

Post by tainted-meat »

I’d keep it for fun money and see if it can make a rebound.
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sport
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Re: GE Wabco Merger

Post by sport »

tainted-meat wrote: Sat Feb 23, 2019 4:58 pm I’d keep it for fun money and see if it can make a rebound.
That is what we have been doing. However, with tax complications, I just want to be rid of it. We could give it away, but it is better to use QCDs for such gifts.
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sport
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Re: GE Wabco Merger

Post by sport »

There must be other Bogleheads that hold GE stock. Am I the only one concerned about this merger/distribution?
Mccwdc
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Re: GE Wabco Merger

Post by Mccwdc »

I, too, have quite a bit of GE stock I inherited (purchased 1940!) And have ridden it down. Got the same perspective and didn't understand a word of it! I'm going to hold on because I think this new CEO can turn company around. Just a gamble.
MnD
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Re: GE Wabco Merger

Post by MnD »

Maybe Wabco or GE will make a nice rebound. Sell it if you have a better investment uses for the money but I wouldn't worry about tax complications, nor should this transaction be of any other "concern". Mutual funds, with potentially 5 different types of distributions are more complex tax-wise.

https://www.reuters.com/article/us-getr ... SKCN1IM12I
"The deal is tax-free for GE and Wabtec shareholders because it is structured as a so-called Reverse Morris Trust, with GE spinning off the transportation unit and simultaneously merging it with Wabtec. The transaction is expected to close in early 2019."
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Re: GE Wabco Merger

Post by jebmke »

sport wrote: Sat Feb 23, 2019 6:26 pm There must be other Bogleheads that hold GE stock. Am I the only one concerned about this merger/distribution?
I have a small holding with almost no basis. If this were a taxable transaction, I'd dump the shares in my DAF and be done with it. I may anyway just to get it off the books.
When you discover that you are riding a dead horse, the best strategy is to dismount.
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sport
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Re: GE Wabco Merger

Post by sport »

MnD wrote: Sat Feb 23, 2019 6:54 pm "The deal is tax-free for GE and Wabtec shareholders because it is structured as a so-called Reverse Morris Trust, with GE spinning off the transportation unit and simultaneously merging it with Wabtec. The transaction is expected to close in early 2019."
From the prospectus, page 13:
"If you are a U.S. holder(as defined...), shares of SpinCo common stock you receive in the Distribution will be treated as taxable distribution in respect of your GE common stock. U.S. holders that receive Wabtec common stock in the Merger generally will be treated as having disposed of their SpinCo common stock in a taxable exchange."

This doesn't seem so "tax-free" to me. There will be a taxable distribution, a capital gain/loss situation, possible cash from the sale of fractional shares, adjustment to the cost basis of the GE stock, etc. After all that, I will have a very small number of Wabtec shares to sell and keep track of the basis, and sale price. After writing this, I have convinced myself even more that I want to sell and be done with this cluster mess.
MnD
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Re: GE Wabco Merger

Post by MnD »

sport wrote: Sat Feb 23, 2019 8:16 pm
MnD wrote: Sat Feb 23, 2019 6:54 pm "The deal is tax-free for GE and Wabtec shareholders because it is structured as a so-called Reverse Morris Trust, with GE spinning off the transportation unit and simultaneously merging it with Wabtec. The transaction is expected to close in early 2019."
From the prospectus, page 13:
"If you are a U.S. holder(as defined...), shares of SpinCo common stock you receive in the Distribution will be treated as taxable distribution in respect of your GE common stock. U.S. holders that receive Wabtec common stock in the Merger generally will be treated as having disposed of their SpinCo common stock in a taxable exchange."

This doesn't seem so "tax-free" to me. There will be a taxable distribution, a capital gain/loss situation, possible cash from the sale of fractional shares, adjustment to the cost basis of the GE stock, etc. After all that, I will have a very small number of Wabtec shares to sell and keep track of the basis, and sale price. After writing this, I have convinced myself even more that I want to sell and be done with this cluster mess.
I'm pretty sure the Morris Trust provision provides for an offsetting gain and loss, hence no net tax liability once the two simultaneous exchanges are completed. But regardless, if you use something like Turbotax and download your 1099's from your brokerage, there isn't any complexity you need to be particularly aware of or worried about beyond taking a look at your return and imported 1099's. If your GE holding is old you might need to enter the basis manually which takes about 10 seconds but it should still be provided on the later pages of your consolidated 1099. And you'll have to do that in any event of a GE sale for an old holding regardless if sale is prior to and after various spin-offs.

You seem generally unhappy about your position in GE and IMO are catastrophizing about minor issues so you certainly should sell if this modet position is causing an oversized amount of anxiety. But as someone who used to own a lot of individual stocks, I can't tell you how many times the "throw in the towel" mood coincides with a price bottom and that's _not_ a coincidence.

Note GE stock is up around 10% this morning amid yet more divestiture news.
https://www.marketwatch.com/story/ges-s ... 2019-02-25
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Corgitodd
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Re: GE Wabco Merger

Post by Corgitodd »

Catastrophizing!!!!

My new word of the day. Thanks!
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sport
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Re: GE Wabco Merger

Post by sport »

MnD wrote: Mon Feb 25, 2019 10:24 am
sport wrote: Sat Feb 23, 2019 8:16 pm
MnD wrote: Sat Feb 23, 2019 6:54 pm "The deal is tax-free for GE and Wabtec shareholders because it is structured as a so-called Reverse Morris Trust, with GE spinning off the transportation unit and simultaneously merging it with Wabtec. The transaction is expected to close in early 2019."
From the prospectus, page 13:
"If you are a U.S. holder(as defined...), shares of SpinCo common stock you receive in the Distribution will be treated as taxable distribution in respect of your GE common stock. U.S. holders that receive Wabtec common stock in the Merger generally will be treated as having disposed of their SpinCo common stock in a taxable exchange."

This doesn't seem so "tax-free" to me. There will be a taxable distribution, a capital gain/loss situation, possible cash from the sale of fractional shares, adjustment to the cost basis of the GE stock, etc. After all that, I will have a very small number of Wabtec shares to sell and keep track of the basis, and sale price. After writing this, I have convinced myself even more that I want to sell and be done with this cluster mess.
I'm pretty sure the Morris Trust provision provides for an offsetting gain and loss, hence no net tax liability once the two simultaneous exchanges are completed. But regardless, if you use something like Turbotax and download your 1099's from your brokerage, there isn't any complexity you need to be particularly aware of or worried about beyond taking a look at your return and imported 1099's. If your GE holding is old you might need to enter the basis manually which takes about 10 seconds but it should still be provided on the later pages of your consolidated 1099. And you'll have to do that in any event of a GE sale for an old holding regardless if sale is prior to and after various spin-offs.

You seem generally unhappy about your position in GE and IMO are catastrophizing about minor issues so you certainly should sell if this modet position is causing an oversized amount of anxiety. But as someone who used to own a lot of individual stocks, I can't tell you how many times the "throw in the towel" mood coincides with a price bottom and that's _not_ a coincidence.

Note GE stock is up around 10% this morning amid yet more divestiture news.
https://www.marketwatch.com/story/ges-s ... 2019-02-25
Many thanks for the advice. I sold all of my other individual stocks years ago. The reason I kept this one was the large capital gain, and I planned to give it away to charity. However, QCDs became available to us and that superseded the plan to give it away, so I kept it. With the dividend cut, there was really no longer any reason to hold it. This merger was just the spur I needed to take some action. I sold it this morning.
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Re: GE Wabco Merger

Post by likegarden »

I worked at GE and had GE stock, but in 1965 I remembered that we should not hold more than 5% of our money in a single stock. So I sold all in 2 years, was lucky.
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Re: GE Wabco Merger

Post by Maple »

MnD wrote: Sat Feb 23, 2019 6:54 pm ...
https://www.reuters.com/article/us-getr ... SKCN1IM12I
"The deal is tax-free for GE and Wabtec shareholders because it is structured as a so-called Reverse Morris Trust, with GE spinning off the transportation unit and simultaneously merging it with Wabtec. The transaction is expected to close in early 2019."
MnD,

The news story you linked (dated May 21, 2018) correctly refers to the original deal terms being a non-taxable event to shareholders. But, the deal terms changed and the revised terms are a taxable event. Hence, the confusion.

"Following the revision, the transaction will be considered a taxable dividend for U.S. federal income tax purposes."
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sport
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Re: GE Wabco Merger

Post by sport »

I sold the GE yesterday. Today, I received a transaction confirmation that I sold a few shares of WABTEC for $0.00. I guess the value of those shares was included in the price I received for GE.
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Re: GE Wabco Merger

Post by Jill07 »

sport wrote: Sat Feb 23, 2019 4:42 pm We have a small holding in GE that was inherited many years ago. We are mutual fund investors and are not well versed in the pitfalls of holding individual stocks. So, we have not paid a lot of attention to the GE stock as it is the only individual stock we hold. Unfortunately, we rode it all the way down. Today, we received a prospectus that describes a merger of a GE division with a division of Wabco (Westinghouse Air Brake Co.). As part of that merger, there will be a spinoff of stock to GE shareholders. The amounts apparently are small. The prospectus is 135 pages of small print, with a 45 page appendix. As I understand it, GE shareholders will receive shares of "Spinco". This is a stock that cannot be traded. The Spinco shares will then be sold in exchange for shares of Wabco. They project 1.85 shares of Wabco for each 100 shares of GE. Of course, there are tax consequences to all of this. The merger is scheduled for February 27, 2019. (Thanks for all the advance notice.) :annoyed With the drastic cut in the GE dividend, and now this complication of our tax situation, I am inclined to sell the stock on Monday morning. It just seems to be more trouble than its worth to own it. The GE stock was originally purchased a very long time ago, so the cost basis is low, perhaps a little more than the current price. Is there any reason to keep this stock?
If you inherited this GE stock, you got a "stepped-up" cost basis. Your cost basis would be the price of the stock on the date of death of the person you inherited it from. You would probably have a loss in this stock. You can use the loss to offset other capital gains & possibly deduct as much as 3k from your income.
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Re: GE Wabco Merger

Post by boomer_techie »

sport wrote: Tue Feb 26, 2019 9:22 am I sold the GE yesterday.
No, you didn't quite sell it yesterday. You traded it yesterday. The transaction will settle tomorrow.
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Re: GE Wabco Merger

Post by sport »

boomer_techie wrote: Tue Feb 26, 2019 5:41 pm
sport wrote: Tue Feb 26, 2019 9:22 am I sold the GE yesterday.
No, you didn't quite sell it yesterday. You traded it yesterday. The transaction will settle tomorrow.
It may not be settled, but the money is in my account. So, as far as I am concerned, it is sold.
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Re: GE Wabco Merger

Post by Electron »

I also hold shares in GE and now have 5.000 shares of Wabtec with cost basis listed as $75.38 per share. Does anyone know what happened with the fractional shares? My account provides no information other than the credit of the 5.000 shares of Wabtec. I also don't see any information that it was a taxable event.
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Re: GE Wabco Merger

Post by beebog »

Electron wrote: Fri Mar 01, 2019 6:17 pm I also hold shares in GE and now have 5.000 shares of Wabtec with cost basis listed as $75.38 per share. Does anyone know what happened with the fractional shares? My account provides no information other than the credit of the 5.000 shares of Wabtec. I also don't see any information that it was a taxable event.
I own shares of GE, but I don't see any shares of Wabtec. Its possible I just don't own enough GE to qualify for a full share. But I do see cash added to my account in my activity. The activity is listed as "IN LIEU OF FRX SHARE SPINOFF FROM:(GE ) WABTEC CORP COM" and the amount is under $75. This is at Fidelity. It was credited as of 2/28. My shares are in a ROTH so I don't have to worry about tax.
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Re: GE Wabco Merger

Post by rasta »

ge shareholders received .005371 shares of WAB for each share of ge stock they held.

since fractional shares are not issued, "cash in lieu of fractional shares" will be credited.
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Re: GE Wabco Merger

Post by averagedude »

GE is a dumpster fire. I know a couple of retirees that were over concentrated in the stock and they are in the hold and hope position. Holding and hoping that one day they will break even. Luckily for them, they are doing great because they have nice pensions.
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Re: GE Wabco Merger

Post by Wiggums »

averagedude wrote: Fri Mar 01, 2019 9:22 pm GE is a dumpster fire. I know a couple of retirees that were over concentrated in the stock and they are in the hold and hope position. Holding and hoping that one day they will break even. Luckily for them, they are doing great because they have nice pensions.
I have a coworker that’s still talking about his GE stock and what it was worth when Jack Welsh was CEO. Unfortunately, the stock will never return anytime soon because they are selling off assets like crazy. People on here talk about PG&E also. I think that one caused the dumpster fire. I stopped buying individual stocks a long time ago.
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Re: GE Wabco Merger

Post by munemaker »

Is WABCO the same company as Wabtec? Are they related? How?
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Re: GE Wabco Merger

Post by Small Savanna »

I own some GE, and a few shares of Wabtec suddenly appeared in my Schwab account this week. They show a basis of $0, so apparently all the basis stayed with the GE shares. The holding period shown is the same as the underlying GE shares. There really isn't any tax issue until sold.
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Re: GE Wabco Merger

Post by The Casualty »

Electron wrote: Fri Mar 01, 2019 6:17 pm I also hold shares in GE and now have 5.000 shares of Wabtec with cost basis listed as $75.38 per share. Does anyone know what happened with the fractional shares? My account provides no information other than the credit of the 5.000 shares of Wabtec. I also don't see any information that it was a taxable event.
My fractional WAB shares were converted to cash and put in my core MM (IRA) about $40 at FIDO.
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Electron
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Re: GE Wabco Merger

Post by Electron »

Here is a very informative article about the merger of Wabtec and GE Transportation. The new company will now be included in the Fortune 500.

https://finance.yahoo.com/m/2117508c-cc ... ng-ge.html

"The deal, first announced in May 2018, combines Wilmerding-based Wabtec’s rail products manufacturing business — brakes, cables, electronics — with Chicago-based GE Transportation’s locomotive business — freight and passenger transit — to create the third-largest railroad equipment and services company in the world."

Wabtec does pay a quarterly dividend of $0.12 for a yield of 0.66%. The cash from the fractional shares did show up in my account today.
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Re: GE Wabco Merger

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sport wrote: Sat Feb 23, 2019 6:26 pm There must be other Bogleheads that hold GE stock. Am I the only one concerned about this merger/distribution?
I own some GE and have been busy so didn't follow this until the WAB appeared in the account this week or last. I thought it was some form of error in my account.

I only have a handful of shares so for now will leave alone.

The liquidated fractional shares are treated as normal income (called and asked Schwab about it a bit ago).

Anyway, would have preferred to not receive any of this (like many!) TBD
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Re: GE Wabco Merger

Post by rasta »

F150HD wrote: Thu Apr 11, 2019 11:07 am
sport wrote: Sat Feb 23, 2019 6:26 pm There must be other Bogleheads that hold GE stock. Am I the only one concerned about this merger/distribution?
I own some GE and have been busy so didn't follow this until the WAB appeared in the account this week or last. I thought it was some form of error in my account.

I only have a handful of shares so for now will leave alone.

The liquidated fractional shares are treated as normal income (called and asked Schwab about it a bit ago).

Anyway, would have preferred to not receive any of this (like many!) TBD
i don't believe schwab is correct on this, it is my understanding "cash in lieu" is treated as a sale and will be reported on your 1099, you will either have a capital gain or loss on this transaction.
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F150HD
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Re: GE Wabco Merger

Post by F150HD »

rasta wrote: Thu Apr 11, 2019 3:00 pm
F150HD wrote: Thu Apr 11, 2019 11:07 am
sport wrote: Sat Feb 23, 2019 6:26 pm There must be other Bogleheads that hold GE stock. Am I the only one concerned about this merger/distribution?
I own some GE and have been busy so didn't follow this until the WAB appeared in the account this week or last. I thought it was some form of error in my account.

I only have a handful of shares so for now will leave alone.

The liquidated fractional shares are treated as normal income (called and asked Schwab about it a bit ago).

Anyway, would have preferred to not receive any of this (like many!) TBD
i don't believe schwab is correct on this, it is my understanding "cash in lieu" is treated as a sale and will be reported on your 1099, you will either have a capital gain or loss on this transaction.
That was my initial thought, when I asked the brokerage 'rep' about it (short term cap gain/loss), she didn't know so had to 'call me back' after talking to person X above her. Dunno. I wish none of this had occurred to begin with.
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Electron
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Re: GE Wabco Merger

Post by Electron »

rasta wrote: Thu Apr 11, 2019 3:00 pmi don't believe schwab is correct on this, it is my understanding "cash in lieu" is treated as a sale and will be reported on your 1099, you will either have a capital gain or loss on this transaction.
I found an article with some information on this subject.

https://www.fool.com/knowledge-center/h ... ule-d.aspx

It does sound like Schedule D may need to be used. Let's hope our brokerage firms provide the necessary information. My cash in lieu is currently shown as a stock split. The only other information currently provided is my cost basis in WAB at $78.06 per share.
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Re: GE Wabco Merger

Post by Electron »

I noticed late last week that Wabtec finally rose above its February spinoff price. It looked like a good time to sell my five shares and eliminate the very small holding.

Yesterday I decided to enter a sell order and discovered that limit orders are allowed on small lots. I entered a limit order at $79.50 not really expecting it to be executed in the near term. Today I received an email at 1:30 PM ET from Vanguard brokerage stating that my order had executed. That added a little fun to my day!
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Re: GE Wabco Merger

Post by Jerry55 »

Back in 2008 - 2009, I purchased about 1,300 shares of Ford and 600 shares of GE.
In Feb. 2010, I sold all of my FORD stock (it doubled from about $5 to just over $10), but my GE shares I watched tumble from when I bought it around $12-$14, up to ~ $30, then down to $9, so I sold it for TLH in Oct. 2019 (Tax Loss Harvesting)

Thinking I basically closed the TD Ameritrade account, I found out 2 weeks later that I had 3 shares of WAB, and I'm wondering WHAT THE HECK IS WAB ?!?

That's when I found out about WAB, each share worth about $77, so I sold them also for about $210 total. I had to look it up, coz I never knew.
I'm DONE with individual stocks, but it was a good exercise in knowing that I better stick with Mutual funds, coz at least I understand those.
I learned a lot reading this thread.....so, thank you !

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Electron
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Re: GE Wabco Merger

Post by Electron »

Has anyone's brokerage automatically adjusted the cost basis of the remaining GE shares following the spinoff? I just checked mine and there has been no change.

I did discover that my brokerage has detailed information on the spinoff that I had not noticed before. Under cost basis, there is a tab to view realized gains and losses. It shows that I had 0.1562 fractional shares and the cost basis was $78.06 per share. The cash paid out actually represents a capital loss of $0.84 based on my original cost basis in GE.

My recent sale of Wabtec shows a small capital gain based on the stock price increase since the date of the spinoff. Unfortunately, the gains and losses are shown as short term which I don't believe is correct.
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increment
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Re: GE Wabco Merger

Post by increment »

Your broker may be correct. For some mysterious accounting reason, at the time the transaction was treated as a taxable event. I believe that it is treated as though the shareholders received a fully taxable dividend in February, which is also the acquisition date of the WAB shares distributed. No portion of the old GE basis would be transferred over to WAB.
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Re: GE Wabco Merger

Post by rossington »

increment wrote: Thu Nov 21, 2019 4:38 pm Your broker may be correct. For some mysterious accounting reason, at the time the transaction was treated as a taxable event. I believe that it is treated as though the shareholders received a fully taxable dividend in February, which is also the acquisition date of the WAB shares distributed. No portion of the old GE basis would be transferred over to WAB.
Correct. GE shareholders recieved Wabtec stock or cash in lieu of fractional shares...thus no change to GE basis. Short term gains/losses is also correct.
The cash paid out actually represents a capital loss of $0.84 based on my original cost basis in GE.
The loss pertains to the cash portion resulting from the immediate sale of the fractional Wabtec stock. Ours was.
Last edited by rossington on Thu Nov 21, 2019 5:56 pm, edited 1 time in total.
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Re: GE Wabco Merger

Post by Jerry55 »

rossington wrote: Thu Nov 21, 2019 4:53 pm Correct. GE shareholders recieved Wabco stock or cash in lieu of fractional shares...thus no change to GE basis. Short term gains/losses is also correct.


Well, NOW I know !
I got sick and tired of holding onto those shares of GE for so long, so I decided to sell them (600 shares purchased late 2008/early 2009)
and decided to use the losses against upcoming Wellesley distributions. TD Ameritrade later said I had $$$ still in my account, and I found out
I had 3 shares of WAB....and I had NO IDEA where they came from ! LOL ! So I sold them also, and closed the account for good.

Thank You for that bit of info ! :sharebeer
Retired CSRS on 12/19/2012 @ age 57 w/39 years | Good Bye Tension, Hello Pension !!!
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Electron
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Re: GE Wabco Merger

Post by Electron »

Thanks increment and rossington for the help. I did find a press release from Wabtec mentioning the taxable dividend.

https://www.wabtec.com/press-releases/8 ... ruary-2019

"Under this modified structure, the spin-off will be considered a taxable dividend for U.S. federal income tax purposes."

My $0.84 capital loss on the fractional shares now makes more sense although my proceeds of $11.35 on 0.1562 shares imply a sale price of $72.66. The stock did not trade that low at the time so perhaps there were fees involved. This spinoff appears to be an exception in regards to holding period as I believe most spinoffs retain the holding period of the original shares.

It will be interesting to see how everything is reported next year on the Consolidated 1099 forms.
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Re: GE Wabco Merger

Post by Electron »

In regards to the statement that the spin-off would be a taxable dividend for U.S. federal income tax purposes, I found this very informative article from Bloomberg.

https://news.bloombergtax.com/daily-tax ... limitation

"In some cases, spin-offs have a dual character. They can be tax-free at the shareholder level, but taxable at the distributing corporation level."

"While GE has revised its deal with Wabtec, such that the spin-off will now be taxable at both the GE and GE shareholder levels, the PLR issued in connection with the original transaction provides a blueprint for structuring a “partially taxable” Morris Trust or “Reverse Morris Trust” transaction."

Is anyone's brokerage firm showing the distribution as taxable? My brokerage account still lists the transaction as a stock split with no indication that it is taxable.

It's also possible that the brokerage firms do not have information on the exact tax details of the spinoff. I wonder if this is a case where we will be told to consult a tax adviser.
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Re: GE Wabco Merger

Post by obvious103 »

Reviving this thread for renewed discussion now that we are getting 1099s. I had 40 shares of GE at the time of the merge. My 1099 shows 0.216 WAB at 74.73 for proceeds of 16.14.

The only item that appears to be an actual line item for taxes is a 0.73 loss. Basis is listed as 16.87, but this does not appear as a DIV elsewhere.

Curious if others are seeing similar results.
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Electron
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Re: GE Wabco Merger

Post by Electron »

My brokerage 1099 finally arrived and the Wabtec distribution is shown as a taxable dividend dated 2-25-19. The dividend is 100% qualified.

I'm not overly surprised but there was no indication earlier that the dividend was taxable.

In regards to the fractional shares, the 1099 is reporting a small short term capital loss. I sold the remaining shares in November which shows as a short term capital gain. Basis in both cases has been reported to the IRS.
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Re: GE Wabco Merger

Post by Jerry55 »

I knew NOTHING about Wabco until I got rid of my GE I've had for 10 years.
I had 600 shares but when I got the paperwork from TD Ameritrade, I couldn't make heads or tails of it.
Apparently, GE only kept data from my last 100 shares I purchased, leaving me in a lurch, but they did show about 3 Wabco shares with an ~ $2 loss.

Thank Goodness TurboTax had an "Import from TD Ameritrade" Function but it only put the 100 GE shares + Wabco into my return.
I had the original figures spent, so I took 5/6ths of that value and put it in as my purchase price for the other 500, TurboTax did Wabco data for me.

I still don't know what Wabco is, nor do I want to anymore, coz I'm OUT of individual stocks for now.
I don't remember any Wabco dividends though, as my usual $132 quarterly dividend dropped to a $7 quarterly dividend last year. :confused :oops:
Retired CSRS on 12/19/2012 @ age 57 w/39 years | Good Bye Tension, Hello Pension !!!
obvious103
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Re: GE Wabco Merger

Post by obvious103 »

Thanks for the replies. I landed on deciding to report my $16.87 as a dividend (even though my brokerage did not report it as such) due to the info here:

https://www.ge.com/investor-relations/i ... -investors

"Tax Forms: GE shareholders will receive a Form 1099-DIV reporting the $78.06 per share dividend of Wabtec."

I figure that's the easiest way to put this to bed for my situation.
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Re: GE Wabco Merger

Post by rossington »

obvious103 wrote: Tue Feb 18, 2020 7:57 pm Thanks for the replies. I landed on deciding to report my $16.87 as a dividend (even though my brokerage did not report it as such) due to the info here:

https://www.ge.com/investor-relations/i ... -investors

"Tax Forms: GE shareholders will receive a Form 1099-DIV reporting the $78.06 per share dividend of Wabtec."

I figure that's the easiest way to put this to bed for my situation.
You are correct. Our basis was reported as an ordinary/qualified dividend. This was just recently corrected on our 1099-B and 1099-DIV to reflect it. Your brokerage may do the same.
"Success is going from failure to failure without loss of enthusiasm." Winston Churchill.
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Re: GE Wabco Merger

Post by Electron »

obvious103 wrote: Tue Feb 18, 2020 7:57 pmhttps://www.ge.com/investor-relations/i ... -investors

"Tax Forms: GE shareholders will receive a Form 1099-DIV reporting the $78.06 per share dividend of Wabtec."
I wonder when that information was posted as it would have been very helpful in the months following the merger. There is also a statement that there is no change to the historic cost basis of GE shares. I had wondered about that earlier as my brokerage firm listed the transaction as a stock split which appears to have been incorrect.

On a positive note, it appears that I can file Schedule D without Form 8949 to report the sale of the Wabtec shares. There is an option to not file Form 8949 if cost basis is reported to the IRS and there are no adjustments.
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Re: GE Wabco Merger

Post by CenTexan »

I'm so confused. . . :confused

I downloaded my 1099 from Vanguard in mid-January (2020) and it listed my 1 share of WAB thus:

___________Total Ord Div___Qual. Div
______________Box 1a_______Box 1b
02/25/2019____$78.06______$78.06
05/24/2019____$0.12________$0.12
08/23/2019____$0.12________$0.12
11/29/2019____$0.12________$0.12

A couple of days ago, I received (in mail) a "Corrected 02/07/2020" 1099 from Vanguard showing my single share of WAB like this:

___________Total Ord Div___Qual. Div
______________Box 1a_______Box 1b
02/25/2019___$125.75_____$125.75 <--- where the heck did this # come from?
05/24/2019____$0.12________$0.12
08/23/2019____$0.12________$0.12
11/29/2019____$0.12________$0.12

Of course, now all my tax calculations are wrong! I'm sure it would be a futile attempt to contact Vanguard to ask them about the change.

Should I just use the first set of figures (the one showing the correct value of the share on the day acquired/given) and compete my taxes? Last year, Vanguard sent me 4 revised 1099s - one which arrived after April 15 - all which centered around a single $15k maturing T-note.
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Re: GE Wabco Merger

Post by CenTexan »

In fact - my online Vanguard accounting shows the value of the Wabtec share was $44.46. Not the $78.06.
Good grief!
rasta
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Re: GE Wabco Merger

Post by rasta »

how much GE did you own prior to the merger?

you also need to account for the fractional shares
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Re: GE Wabco Merger

Post by cas »

CenTexan wrote: Sat Feb 22, 2020 2:47 pm In fact - my online Vanguard accounting shows the value of the Wabtec share was $44.46. Not the $78.06.
Good grief!
I'm not exactly clear on what you are looking at here, but this is what I'm suspecting:

Your GE spun off one full share of WAB + a partial share of WAB. I'm suspecting that the $44.46 is what the partial share of WAB sold for. (Since the partial shares are distributed as "cash in lieu of partial share", they are glommed together and sold on the open market (not sure if it's by some brokerage hired by GE/WAB or by Vanguard), but the price on the open market had dropped a bit before the sale went through, so they didn't sell at $78.06/shr.) You should probably have a 1099-B with showing the sale of the partial share, with a cost basis of ($78.06*partial share amount), a sale price of $44.46 and a small short term capital loss.

The second 1099-DIV is correct. The first one included the value of only the full share(s) you received and did not include the value of the partial share (at the ($78.06*partial_share_number) distribution price/shr, which became the cost basis of the partial share) of the partial share. The second 1099-DIV corrected that to add in the value of the partial share.
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Re: GE Wabco Merger

Post by cas »

CenTexan wrote: Sat Feb 22, 2020 2:41 pm
___________Total Ord Div___Qual. Div
______________Box 1a_______Box 1b
02/25/2019___$125.75_____$125.75 <--- where the heck did this # come from?
Just to be clearer, since my previous sentence was convoluted:

$125.75 should equal 1.partial_share_decimal_value * $78.06.
You should be able to tell what the decimal value of the partial share was by looking at the 1099-B you received showing its sale.
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Re: GE Wabco Merger

Post by CenTexan »

cas:
Thanks for the post. What you say makes sense. Unfortunately, I never received a 1099-B for the sale of the partial share and I checked my online account and there is no record of it in my CONFIRMATION history. But my March statement does show "cash in lieu" of $44.46 for a 2/25/19 trade (3/01/19 settlement) . . . it doesn't mention amount/fraction of share, sale, etc. but I'll assume that $44.46 was generated from the % share being sold.

So if I take that number ($44.46), plus the 3 dividend payments of 12 cents each (36 cents total; for last 3 quarters of 2019), plus add the value of the single share on the day I was given it I still own that should comprise the $125.75 showing on my Corrected 1099-Div.

SOLVE FOR "X":
$44.46 + $0.36 = $44.82
Then, $125.75 - $44.82 = "X" = $80.93
So, $80.93 is the value of the WAB share, as reported by Vanguard to the IRS, on the date of my being given it.

None of my records validate that number, and I see that WAB closed at $70.02 on 2/25/19, but I'm not worried about the few dollars - I just don't want to redo all my tax forms again. and again. and again.
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