Buy out tax treatment

April 4, 2012 2:08 PM

If I've held a stock for ninety days, but te company is bought out in an all cash transaction, do I still have to pay short term capital gains, or do I qualify for different tax treatment?
posted by Pants! to Work & Money (4 answers total)

The answer depends, in part, on the jurisdiction you operate under? I.e., are you in the United States?

If you are in the US, then the answer depends on how the transaction is structured. Assuming this is a publicly traded company we're talking about, shareholders of record will receive communications from their broker regarding the tax treatment of the transaction from the perspective of the shareholder.

Absent more information, it's hard to give a specific answer for your question.
posted by dfriedman at 2:17 PM on April 4, 2012

Sorry, I see your profile indicates you're in Texas. In which case, the answer is: wait for communications from your broker regarding how this transaction is taxed. If you prefer not to wait, you can dig into the companies' filings with the SEC for mention about tax treatment.
posted by dfriedman at 2:20 PM on April 4, 2012

Best answer: dfriedman is right, but in my experience, in the vast majority of cases, you're stuck with the short term gains.
posted by small_ruminant at 2:24 PM on April 4, 2012 [1 favorite]

What dfriedman said. When this happened to me the communication from my broker was pretty quick after the transaction closed. And yeah, in my case it was a short term capital gain.
posted by birdherder at 3:41 PM on April 4, 2012