Cash portion only is subject to cap gains..ie $29.00 received in cash for each RAI share owned.
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I spoke with 2 tax accountants this weekend. Both indicated that the ADR piece of the transaction was not taxable. As one put it, "only the boot(cash) is taxable."
Hey guys! I need some help. What would you guys do with Rai now? Should I sells all 1200 shares or wait for the merger with BTI. I don't know what to do. What would you guys do?
I look at it this way. For those concerned about cap gains, sell your RAI shares prior to the merger. You are probably going to incur cap gains in either scenario. In 1 case you get cash to invest elsewhere or secondly get BTI/BAT shares.
It is taxable according to the merger and special meeting document
as to capital gains , i understand it is the cash that is over the price of the stock when it was first purchase. the stock exchange is not a capital gain until you sell it ..
So, if I'm understanding correctly were the merger to close today on Tuesday we'd make $0.60 a share. BTI- 69.36 X .526= $36.48 $36.48+$29.44= $65.92 $65.92- 65.32= 0.60
A special meeting of shareholders of Reynolds American Inc. (NYSE: RAI) will be held at 9:00 a.m. (Eastern Time) on July 19, 2017 *BAT shareholders are scheduled to vote at 2 p.m. July 19, which would be simultaneous with the Reynolds vote given the time difference. BAT shareholders would be asked to approve additional ordinary, or common, shares of BAT to be provided to Reynolds shareholders as part of the transaction. (?)
Blackouybuzz. I was always confident with your knowledge of the merger. May you enlighten me with the capital gains results if it takes into acct. RAI stock sales (cap gains and cost bases) and if cash gets taxed as well. Thanks
From reviewing the Merger Proposal document, it appears that for individual U.S. shareholders the Full Consideration (cash AND Stock) will be considered income / proceeds for calculation of capital gains - not just the cash received. BUMMER! From page 139 of the Merger Proposal document:
The receipt of BAT ADSs and cash in exchange for RAI common stock in the merger generally will be a taxable transaction for U.S. federal income tax purposes. A U.S. holder of RAI common stock that receives BAT ADSs and cash in the merger generally will recognize capital gain or loss equal to the difference, if any, between (1) the sum of the fair market value of BAT ADSs and cash, including any cash in lieu of fractional BAT ADSs received in the merger, and (2) such holder’s adjusted tax basis in such holder’s RAI common stock exchanged therefor. Gain or loss and holding period will be determined separately for each block of RAI common stock (that is, shares acquired at the same cost in a single transaction) exchanged pursuant to the merger. Any capital gain or loss will be long-term capital gain or loss if the U.S. holder’s holding period for such holder’s RAI common stock is more than one year at the time of the merger. Currently, long-term capital gain for non-corporate taxpayers is taxed at preferential U.S. federal income tax rates. If the U.S. holder has held such holder’s RAI common stock for one year or less at the time of the merger, any capital gain or loss will be short-term capital gain or loss. The deductibility of capital losses is subject to certain limitations. A U.S. holder’s aggregate tax basis in such holder’s BAT ADSs received in the merger will equal the fair market value of such ADSs at the completion of the merger, and the holder’s holding period for such ADSs will begin on the day after the merger.
Received proxies last night on Merger. Signed sealed & delivered this morning...approved of course.
Has anyone signed onto the lawsuit involving the upcoming RAI/BAT merger/acquisition with the law firm Monteverde & Associates?
for you experts; will we get our 3rd quarter dividend and then the merger after that?
So when the merger closes, will BTI see downward price pressure as some RAI longs who don't want the international exposure sell off their newly acquired BTI shares? And for those who do sell their BTI, will they flock to MO?
It's coming down to the wire now. The shareholder's meeting is set for July 19. Which that means that in about a month, we'll be sitting on a ton of cash! LOL.
Any guidance on the dividend frequency after the RAI/BTI merger? Quarterly or Semi annually with uneven distributions?
Any body can help me to make it clear on the merger formula ?
Is this a good price to get in at? We are now off $3 from the highs. Thanks
For this Merger, when do you have to buy shares, in order to get the $29.88 per share and .52 of BTI stock?