Ok, first timer here....I have a few clients that held stock in a local bank. The local bank was bought out by a larger bank. Here is what my clients recieved for each share of stock held in the original bank.
Each Pavilion Bancorp shareholder will receive 1.4209 shares of First Defiance common stock and $37.50 in cash.
So my question is, how do I handle the stock sale with relation to the original stock basis? Does the original stock basis get netted with the cash payment and cash-in-lieu the client received leaving the client with a $0 cost basis in the new company? Or does the old basis follow the new stock in the new company and the whole cash considerations be what is taxable? Have been unable to find the answer anywhere. If anyone has any links/literature for viewing that would be excellent.
