I think I have the cost basis worked out, but any insight on whether turbotax will estimate the cost basis and cost basis allocation starting from a known basis for the EMC Shares would be helpful. My understanding this merger is considered almost two parts: I'm trying to understand how to input into turbotax.

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Did you realize the gain this year? Is your stock held in a broker account? I have a followup question. Is it possible to explain Sec and redemption with an example. I am a tax preparer and I am preparing a tax return for an EMC employee. I am assuming that the cash paid for each share of EMC stock was included in the employee's W That is the basis in the stock received at the merger and the cash bonus that was received was included in their W-2 and taxes withheld accordingly.

I have a call into EMC to make sure that I am interpreting this correctly and that the cash received was already included in the employee's W I have confirmed that the Merger Buyout has already been included in the employee's W-2 and taxes withheld accordingly. If you choose to take the Merger Buyout of your stock options, it will show on your paystub as Mbo and included in your W To my knowledge, EMC should have made that very clear to employees in their W-2 packet and it doesn't appear that they did.

There is nothing on the W-2 itself showing the merger buyout portion of their total income as it is lumped into gross wages on the W You have to look at the last pay stub to realize that the merger buy out cash was already included in gross wages.

So southharvey, have you determined per share FMV used by EMC to calculate the W-2 amount reported? That's what I am missing.

EMC Employee Stock Options or Equity | bozunoteyuta.web.fc2.com

I don't know why the FMV of the DVMT shares wouldn't also be ordinary income. It absolutely will not. The only exception to TurboTax actually assisting in the calculation of basis pertains to employer stock incentive programs, RSU's ISO's, ESPP's, etc. I'm not sure I understand what you've said there. Per the Form issued by Dell they are recommending a two-part treatment of the transaction consisting of:.

10 Things EMC Employees Want To Know About The Dell Merger - Page: 6 | CRN

Dell believes that Here's the general rundown of how you handle Section exchanges. TurboTax doesn't "natively" handle Section exchanges so you must do all your calculations here outside of TurboTax to derive how you'll report the sale of this part of your EMC stock.

Under this approach, the value of 0.

So, to make life simple by assuming you just had one lot of EMC, you'll "essentially" report the sale twice, once for the Section component and once for the redemption component. I put essentially in quotes since, mechanically, there would be nothing incorrect or wrong by figuring out your Section treatment and your Redemption treatment and then simply slapping them together and reporting this as only one sale in TurboTax. Too, you'll probably want to wait until the B for this sale is in your hands - late February most likely - since I'm sure there will be some information on that form that might be helpful.

Tom, thank you for this excellent breakdown on how to handle this Dell-EMC merger transaction. I have a follow up question In the case of the earlier merger, it was a straight stock exchange no cash other than CIL and treated as a tax-free reorg per Section of the tax code.

I guess the bottom line is And if so, how do I enter this in TurboTax In other words, either the entire gain for a given lot is treated as QSBS or not at all, based on my earlier tests with TurboTax Premier desktop version Any insight you can provide on this is greatly appreciated I have only a hand-waving understanding of all the ins and outs of QSBS and it's an area of the tax law that seems to get changed regularly, so I really don't know how to answer you.

You do have a "sale" of the stock. It would seem like the first step, though, is to do the lot by lot calculation that's needed and, I guess, if you had a gain in all the lots you could then grind that information through the regular "stock" interview until you encounter the special situations page, and that's where you'd report the basis you've derived and report your gain as allowed by the deal.

What's a mystery to me is if you're not able to report your entire gain if the new stock continues to be QSBS, or not, and to what extent.

I just don't have anything I can provide here other than speculation. If you have enough stock to warrant it this might be the time to find a tax lawyer or CPA with extensive experience in this area - I'd think Silicon Valley is loaded with 'em - and let them guide you on this particular part of your income tax return.

Be sure and check these figures against your own calculations. Thank you, I tried the formulas above but couldn't't get to your figures. Any chance you could show me the math to these calculations? The formula and math did not work for me either Excel example with some calculation would be awesome. Hi Tom, Is the sale of proceeds of EMC shares on the section portion taxable?

If so, what cost basis can I apply against the sale of EMC shares? You need to derive it since the gain is limited to the lesser of the cash received or your "actual" gain.

And your "actual" gain is determined by allocating Then you'd use the remainder of your EMC basis against the "Redemption" cash, for another gain. You could then report two separate "trades" or add the proceeds and basis amounts together as one "sale".

Do I need to do any other calculations? Thank you for your help. GAIN Short Term Covered Tax Lot: EMC Corp Mass Mgr. DELL Tech INC Com CL V. So while you do have a gain on each of the 3 "lots" you listed, you might be netting some losses in there to come to that gain. Too, for each lot where you do have a gain you report the lesser of the cash received or the "actual" gain on that lot using the cash plus stock received as the "proceeds".

That said I've frequently advised people who have years and years of dividend reinvestments to pull together a year's worth of reinvestments as one lot, just to cut down on the work involved and under the assumption that's "close enough.

Tom, I found more details on the tax lots. I only had div reinvestments from to Could I send you the reports via email? Im ready to file my taxes, except for this one stock merger. It still has me perplexed.

Your help is very appreciated. I'm a user like you so I'm not going to post my email in here since every spammer in the world with an Internet connection can see it.

This is a terribly complex deal and I GUARANTEE you that most income tax returns that report this transaction will be wrong. Even though I revel in the "small stuff" details I know as a practical matter that "close enough" usually suffices when it comes to income tax reporting. Go with my numbers, go with your original numbers, try you own hand at coming up with the numbers. Do you best and go with it, and don't lose a minute of sleep.

Tom, I understand not wanting to list your email. I was able to copy and paste the info. EMC CORP Current quantity: There's no need for me to do any more because the broker obviously has made ALL the calculations for you and even split the transaction into its two component parts, one for the Sec calculation and the other for the Redemption calculation. The reason I came up with different answers based on your summary information is because the "Cost Basis" figures you disclosed were not your actual cost figures for the shares; they are the cost figures the broker "derived" in order to come up with the correct gain to report on your B.

Have a nice day! If it would be possible to walk through this step-by-step for how to do this in TurboTax including how to calculate before hand it would be super helpful. People come to TurboTax AnswerXchange for help and answers—we want to let them know that we're here to listen and share our knowledge.

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How to input in turbotax? Answer 9 people found this helpful "I think I have the cost basis worked out, but any insight on whether turbotax will estimate the cost basis and cost basis allocation starting from a known basis for the EMC Shares would be helpful.

Per the Form issued by Dell they are recommending a two-part treatment of the transaction consisting of: SECTION Here's the general rundown of how you handle Section exchanges. Losses are NOT recognized in your tax return, they do not offset gains on "gain" lots. Gains ARE recognized but only up to the LESSER of cash received or the gain as calculated per 1 above.

Accordingly you need to derive the basis to use against the reported cash proceeds to come to the gain - if any - you have determined. If you have a loss clearly basis is equal to the proceeds in order to report "no loss". For each lot your basis in the stock of the new company is: The holding period of the each lot tendered of the old stock carries over to the new lot received of the new stock. You then attribute, proportionally, basis from each lot of the acquired company to the fractional share and and RECOGNIZE gain or loss on the CIL transaction.

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