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Bringing Clarity to a Complex World

By: Pam Duffy, CPA / DeJoy, Knauf & Blood, LLLP Last week, the IRS released Form 8937, “Report of Organizational Actions Affecting Basis of Securities”, which is a filing required for corporations to report 2011 ”organizational actions” affecting basis of stock. All domestic and foreign issuers of securities owned by U.S. taxpayers are required to comply with this reporting requirement for 2011 by filing Form 8937 (or posting it on the public company website) by January 17, 2012.

An “organizational action” may include, but is not limited to: • • • •

Stock Splits, Mergers & Acquisitions, Spinoffs, Non-taxable stock dividends,

For 2011, these rules apply only to corporate stock transactions with an exception for RICs, REITs and S Corporations. (RICs will be subject to these rules in 2012, and beginning in 2013, the reporting rules will be expanded and impose a filing deadline of 45 days after the organizational action.) Taxpayers with organizational actions do not need to furnish statements to security holders deemed exempt, such as: • • • • •

Corporations and REITS Tax exempt organizations Governments Security dealers Banks

The information provided by Form 8937 should enable each security holder to determine their basis, as affected, by the organizational action.

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IRS Released Form 8937  

This is a report of organizational actions affecting basis of securities. Read the following article from Pam Duffy a manager in our tax de...

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