<topic sku="core" tNum="288882" author="erinpa" xmlns="x-schema:hhTopicSchema.xml"><index><title>Learn about the tax consequences of mergers</title><category>investing</category><klink type="cncpt">Tell me about the tax consequences of mergers</klink></index>
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<p>If you hold stock in a company that is part of a merger, your <glossary>cost basis</glossary> per share (or average cost basis) may change even though your total cost basis stays the same. This is important for calculating your capital gains later when you sell shares. When you record a merger, Money automatically calculates your new cost basis for you.</p>
<p>For example, you own 100 shares of Company A with a cost basis of $150/share, which totals $15,000. Company A merges with Company B. Company B offers you 0.75 shares of Company B for each share of Company A you own. This means that you now own 75 shares of Company B. Your new cost basis is $15,000 divided by 75 shares, or $200/share.</p>
<p>Consult your tax advisor for more information.</p>
<p variant="note">By importing your Money investment information to GainsKeeper, you can take advantage of precise capital gains calculations that adjust your holdings for mergers, as well as for stock splits, spin-offs and wash sales. GainsKeeper also helps you complete your IRS Schedule D quickly and easily. Plus, you'll have access to tools and suggestions that could help save money on your taxes. All Microsoft Money users receive a free 30-day trial for GainsKeeper and discounts on an annual subscription. Money Premium and Money Small Business users get a whole year free!</p>
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<tease>Learn more about GainsKeeper</tease>
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<ol>
<li>On the <emph>Investing</emph> menu, click <emph>Portfolio</emph>.</li>
<li>In the left pane on the <emph>Other Tasks</emph> list, click <emph>Capital gains tracking for Schedule D</emph>.</li>
