![]() do I calculate the Dell-EMC merger transaction per your steps above, and THEN apply the 50% gain exclusion for QSBS "eligible gain" from the earlier merger? And if so, how do I enter this in TurboTax. 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 368 of the tax code. if the EMC shares were originally acquired from an earlier acquisition of another company that may be eligible for qualified small business stock (QSBS) treatment per Section 1202, how would you handle the "eligible gain" component with respect to this transaction above? Tom, thank you for this excellent breakdown on how to handle this Dell-EMC merger transaction. ![]() Too, you'll probably want to wait until the 1099-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. I put essentially in quotes since, mechanically, there would be nothing incorrect or wrong by figuring out your Section 351 treatment and your Redemption treatment and then simply slapping them together and reporting this as only one sale in TurboTax. 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 351 component and once for the redemption component. An EMC shareholder who received cash in the Redemption should generally recognize capital gain or loss equal to the difference between the amount of cash received in the Redemption and such EMC shareholder’s tax basis in the 13.23 percent of each EMC Share treated as redeemed in the Merger. "The remaining 13.23 percent of each EMC Share should be treated as redeemed by EMC in the Merger for $3.88 of cash (i.e., the Redemption). Here is Dell's statement for the "Redemption" aspect of the transaction: Under this approach, the value of 0.11146 of a share of Class V Common Stock is $5.26.
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