Calculating cost basis of Express Scripts in Cigna merger

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VAdan
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Joined: Tue Apr 09, 2019 12:46 pm

Re: Calculating cost basis of Express Scripts in Cigna merger

Post by VAdan » Tue Apr 09, 2019 1:04 pm

Hi All,

This is giving me a headache. Would anyone please help me? I bought 210 shares of Merck and never reinvested dividends. I still have 210 shares and now 19 shares of Cigna. I know I had MEDCO and then ESRX. My accountant needs the cost basis of 79 shares of EXPRESS SCRIPTS sold in December 2018, is there a math genius here able to help? Thanks in advance.
:|

Purchase Shares
4/1/1999 10
5/19/1999 100
11/4/2004 100

gensuki
Posts: 79
Joined: Thu Apr 13, 2017 1:11 pm
Location: Virginia

Re: Calculating cost basis of Express Scripts in Cigna merger

Post by gensuki » Tue Apr 09, 2019 2:37 pm

I also have a lingering question about the ESRX to Cigna and cash to boot. The online calculator I used puts 0 cost basis for the cash to boot and all of the ESRX cost basis to the Cigna shares. Logically wouldn't it make sense to proportionally allocate the ESRX cost basis to the cash and to the Cigna shares. Why does it all go to the Cigna shares?

Thanks in advance, Bogleheads.

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munemaker
Posts: 4102
Joined: Sat Jan 18, 2014 6:14 pm

Re: Calculating cost basis of Express Scripts in Cigna merger

Post by munemaker » Tue Apr 09, 2019 7:26 pm

gensuki wrote:
Tue Apr 09, 2019 2:37 pm
I also have a lingering question about the ESRX to Cigna and cash to boot. The online calculator I used puts 0 cost basis for the cash to boot and all of the ESRX cost basis to the Cigna shares. Logically wouldn't it make sense to proportionally allocate the ESRX cost basis to the cash and to the Cigna shares. Why does it all go to the Cigna shares?

Thanks in advance, Bogleheads.
I do not know why it is done that way, but your online calculator is correct. The cash payment has zero basis.

libralibra
Posts: 381
Joined: Sat Jul 30, 2011 2:01 pm

Re: Calculating cost basis of Express Scripts in Cigna merger

Post by libralibra » Wed Apr 10, 2019 3:25 pm

VAdan wrote:
Tue Apr 09, 2019 1:04 pm
Hi All,

This is giving me a headache. Would anyone please help me? I bought 210 shares of Merck and never reinvested dividends. I still have 210 shares and now 19 shares of Cigna. I know I had MEDCO and then ESRX. My accountant needs the cost basis of 79 shares of EXPRESS SCRIPTS sold in December 2018, is there a math genius here able to help? Thanks in advance.
:|

Purchase Shares
4/1/1999 10
5/19/1999 100
11/4/2004 100
Probably you can use yahoo quote history to get an estimate of your MRK basis and then take 5.35% of it to get roughly your ESRX basis.

However, 110 shares of MRK (before the spinoff) wouldn't have resulted in 79 shares of ESRX, so something else is missing here.

spitty
Posts: 215
Joined: Sat Apr 09, 2016 7:01 am

Re: Calculating cost basis of Express Scripts in Cigna merger

Post by spitty » Mon Apr 15, 2019 6:25 am

Hopefully most of us aren't overpaying the IRS due to these buyouts--very confusing indeed! We've held MRK forever in a DRIP; in 2012 our accountant said MEDCO shares were "free" so cost basis was zero. New account said the same last week so claimed the full buyout amount as taxable. With 68 shares of Cigna left she said we'll face the same when they're sold. So we may transfer them to our local animal shelter.
@HelpingRhinos...1 rhino poached every 8 hours in 2017...501(c)(3)

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munemaker
Posts: 4102
Joined: Sat Jan 18, 2014 6:14 pm

Re: Calculating cost basis of Express Scripts in Cigna merger

Post by munemaker » Mon Apr 15, 2019 7:26 am

spitty wrote:
Mon Apr 15, 2019 6:25 am
in 2012 our accountant said MEDCO shares were "free" so cost basis was zero.
The cash boot on these deals has a zero basis. The new stock has a basis based on the deal. Not that difficult to understand.

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