Discussion:Great Demutualization Info
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Discussion Forum Index --> Advanced Tax Questions --> Great Demutualization Info
Discussion Forum Index --> Tax Questions --> Great Demutualization Info
| 21 January 2009 | |
| found at www.kiplinger.com/letterlinks/demutualization . Time to file the protective claims.
Another link is here, not sure why I can't get first to work automatically | |
| 4 June 2009 | |
| Great link Kevin, thanks.
Recently had a new client with demutualzed shares sold in 2008 and have been wrestling with how to handle. Found another kiplinger article http://blog.kiplinger.com/taxquestions/2009/02/tax-basis-of-demutualization.html that says to go ahead and use some basis. Kevin's link help provide basis info. How are others handling this currently? | |
Harry Boscoe (talk|edits) said: | 13 June 2009 |
| But but but... The Fisher case doesn't tell us what to do, unless we have the same facts that Fisher had. It tells us that it's possible to do it, but doesn't tell us how to do it. The judge wrote his answer very carefully. He addressed the facts presented to him, and found a well-reasoned answer for those facts, without making up rules for the rest of us, without offering answers to other situations. Very very well done, your honor! But not much instruction to the would-be followers of the case..
What's the news - is there any - on an IRS appeal of the case? As for myself, I filed my claim many years ago and got my money back promptly. I'm not telling how I did it. It took more than a six-pack. | |
Harry Boscoe (talk|edits) said: | 13 June 2009 |
| I feel I should offer up a note of caution born of experience. While we're tossing garlands at the articles being written and printed and posted and shared about the demutualization case, be wary of reading those articles too carefully and expecting rigorous accuracy in them. For the most part, and I don't mean this critically, the writers aren't really tax techies [like we are...] and not everything they've written is going to hold water when you shine a bright light on it.
Enough with the totally mixa-metaphorical circumlocution, Harry, get to the point. For example, and in specific, in one of the two articles cited above, this is what's said about the basis of proceeds from a demutualization, purportedly based on the Fisher decision: "...the taxpayer’s basis in the proceeds received is equivalent to the cash proceeds received immediately following the demutualization or the fair market value of the stock received in the demutualization as of the date of the demutualization. And in the other cited article, this: "Most experts suggest that the proper basis is the value of the market value of the shares at the time of their distribution to shareholders." Without re-reading the Fisher case, I'm quite sure that the court didn't say that either of these is the tax basis of the proceeds. I mean, where is the [clearly necessary, clearly missing] part of this definition, "...the lesser of the policy owner's tax basis in the pre-demutualization insurance policy and...."? What the court said was that in the facts of the case before it, the basis of the stock was the value it had at the time of the demutualization event. This is not the general rule, this is what applied in the Fisher case. It will not apply all the time. And the judge ain't tellin' us what applies all the time. Well done, judge. | |
