AT&T Wireless Sale To Cingular. A Cost Basis Computation Will Save On Taxes.
Unlike other AT&T divestiture - merger transactions, the sale of AT&T Wireless to Cingular is a taxable sale. The 12/31/1983 AT&T divestiture and the later mergers, splits and spin - offs of AT&T related securities did not require a computation of the tax cost basis (or stock basis) unless a shareholder chose to sell some stock. That was good news since those cost basis computations were horrible. Many AT&T stockholders planned to die before selling AT&T, the Baby Bells, and any other AT&T "offspring!"
That all changed when AT&T was purchased for cash by rival Cingular. All AT&T Wireless stockholders received $15 for each share of AT&T Wireless stock. That cash is taxable. To reduce the capital gains tax a former AT&T Wireless stockholder can subtract the tax cost basis (or stock basis) of AT&T Wireless from the cash that was received.
If you do not want to take time to compute the tax cost basis for AT&T Wireless shares, you can order the Denver Tax Software, Inc. AT&T Divestiture Basis Tracker.
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