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Tax Law (Questions About Taxes)/inversion induced tax from merger


I am hit with huge this year,  having this stock for two decades, (relying on its dividend as a retired), and was going to pass it to my kids.
My adjusted basis is fractional at best, in view of number of splits, and I donít have any other stocks (to offset this gain). I even can not sell this stock over the years to minimize impact of enormous one-time tax  hit.
Normally a low income, with this tax I am in high income bracket, and in addition, apparently subject to NY tax.
I received 1 share of new MDT (now Irish)for each 1 share of old MDT, no cash, and have no meaningful reduction in proportionate interest.
Is there anything I could do in this situation?
Thank you very much for your opinion!


Thanks for your question.

From your description, you do not have a reportable sale, since no cash was received. Sounds like a non-taxable exchange since no cash was involved. Your basis in the old shares carries over to the new ones.

Hope this helps.

John Stancil, CPA  

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John Stancil, CPA


I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I am Professor Emeritus at Florida Southern College. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a CPA practice, specializing in tax, for over 35 years. I am a member of the National Association of Tax Professionals, The Florida Insititute of CPA's, The NCPE Fellowship. In addition I am a Certified Mentor for SCORE. Visit my website at I also offer seminars and consultations to churches and clergy on their tax issues at Also visit my blog, I am listed on Tax Connections at Prepare and file your own taxes at


I hold a doctorate in Accounting, and am a CPA. My certifications of CIA, CFM, and CMA are inactive. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 37 years and have taught accounting and tax at the college level for over 35 years.

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