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  • Cap gains/Buyout Question

    One of the companies in which I have stock is being bought out.  The deal will result in cash for current shareholders.  Is there any way that I can avoid capital gains (all already long term, fortunately)?  Such as an accounting trick of rolling the cash into the acquiring company?

    Definitely a first world problem to pay cap gains at the highest bracket.  Speaking of which, it doesn't look like Trump's brackets will be much help.

    A merger would have been much nicer to shareholders.

  • #2
    Are you talking about a publicly traded company or something like a surgery center.

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    • #3
      Publicly traded.  Orbital ATK, being acquired by Northrop Grumman.  Apparently, it's a good time to be in the rocket business.

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      • #4
        I have had that happen with small cap stocks.  You will probably have a chance to take Northrop Grumman stock instead of $$.

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        • #5
          Hold the OA shares until 2018 when the deal is completed.  You will be issued NOC stock with no cap gains until you sell. NOC is purchasing your shares, not issuing checks.

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          • #6




            Hold the OA shares until 2018 when the deal is completed.  You will be issued NOC stock with no cap gains until you sell. NOC is purchasing your shares, not issuing checks.
            Click to expand...


            Thanks, JZ and Hatton.  I'll definitely hold the shares and see what happens.  But I'm reading "all-cash consideration" for current shareholders, not stock.

            I wasn't sure if there was an accounting method that could avoid cap gains if I manually take the cash and buy the acquiring company.

            Oh, well, like my grandpa always said, "If I'm paying taxes, that must mean I'm making money."

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            • #7




              Hold the OA shares until 2018 when the deal is completed.  You will be issued NOC stock with no cap gains until you sell. NOC is purchasing your shares, not issuing checks.
              Click to expand...


              NOC is issuing a check, not stock.

              Is there any way that I can avoid those cap gains?  Such as, if I take those funds and immediately buy NOC?

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              • #8







                Hold the OA shares until 2018 when the deal is completed.  You will be issued NOC stock with no cap gains until you sell. NOC is purchasing your shares, not issuing checks.
                Click to expand…


                NOC is issuing a check, not stock.

                Is there any way that I can avoid those cap gains?  Such as, if I take those funds and immediately buy NOC?
                Click to expand...


                No, I'm sorry. The like-kind-exchange rules don't apply to investments. Per IRS Fact Sheet re: LKE's -

                "...certain types of property are specifically excluded from Section 1031 treatment. Section 1031 does not apply to exchanges of:


                • Inventory or stock in trade


                • Stocks, bonds, or notes


                • Other securities or debt


                • Partnership interests


                • Certificates of trust"

                Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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