Weird Tax Question - Stock spin-off (1 Viewer)

[Statorama]

Ran into a really weird tax situation and thought you might be able to help.  Figured it didn't hurt to ask.  I've tried to boil it down to as low of numbers as possible.

6/30/2006 - Bought 1 share of Acme Corp.  Grant date 7/1/2005.  Fair Market Value (FMV) on grant date was 44.64.  FMV on purchase date 45.74.  Purchase price was 37.944

11/1/2007 - Stock Spin-Off.  1 Share new Acme Corp., weight 79.48%.  1 Share spin-off Bluto Corp, weight 20.52%

10/1/2009 - Bluto Corp. merges with Popeye Corp.  1 share of Bluto Corp. becomes 1.35 shares of Popeye Corp.

7/2/2015 - Sold 1 share Popeye Corp.  Share Proceeds $62.32

Questions:
- What is the market price on Grant Date per share of Popeye Corp., and how is that determined?
- What is the Fair Market Price on Purchase date per share of Popeye Corp., and how is that determined? (We have the pre spin-off number, how do we determine the fair market price on purchase per share for the spin-off / merger stock?)
- What is the Price Paid Per Share for the Popeye Corp. stock and how was that determined?

 

[Statorama]

I was told it was important to add that this was an ESPP (Employee Stock Purchase Plan), 15% discount

 

[heckmanm]

This is probably more Tasker's beat, but it seems like the calculation of Acme-to-Popeye value would be (Acme * 0.2052 / 1.35). That 1 share of Popeye is effectively 0.152 shares of Acme.

Since Acme was acquired at 37.944, I get 7.7861088 for the Bluto share, and 5.767488 for the Popeye share.

For FMV, since the original purchase was at a 15% discount, divide by 0.85: 6.78528.  Or, multiply the Acme FMV (44.64) by 0.152 to get the same number.

Better question is why wasn't anyone telling me to by Popeye stock back in 2006? 

ETA - I am NOT an accountant, nor am I a tax lawyer.