I doubt the IRS will call anybody out on however they handle this (assuming it is somewhat rational). But be consistent, and keep records.
In theory, your proposed accounting is clearly wrong. I think the correct action would be to split your cost basis into the stock and the CVR. Value the CVR based on [fill in the blank]. If that is 5% of the 13.50, then put 5% of the cost basis over there.
BTW, with the new stock cost basis reporting rules, I lean towards just accepting what is "locked in" by the broker as the basis, unless it clearly is something I must fix.
The IRS is a bit ambiguous on the tax treatment of CVRs. The most common interpretation is that the IRS wants you to assign a value to the CVR and use that as your basis for the CVR going forward. As these CVRS will not be priced after the deal is complete, it becomes a bit difficult. One way would be to just subtract the $13.50 cash from the final trading price and call that the current value of the CVR
Read the "Offer to Purchase" that you should soon receive for a more detailed explanation.
Thanks for the answer. Every once in a while you do get an intelligent response on yahoo. Your answer makes sense.
The short term loss this year would make these a little more attractive to me even though it's really a wash between taxes now or later. Oh well. I like the cvr idea but It's a #$%$ shoot for me. Having no idea of the odds, I'd like to buy it lower. And even at 20 cents they seem like a reasonable shot. I own Cubist/Adolor cvr's btw and I'm hoping for a payoff on those someday.