In what year is stock swap taxable?

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Q. My question relates to the cash and stock portion of the sale to British American Tobacco (BTI) that you wrote about previously. If a taxpayer hands in their RAI stock to BTI in 2018, is the transaction considered reportable in 2018 or 2017?
— Stockholder

A. The acquisition of Reynolds American by British American Tobacco was completed in July 2017.

The holders of certificates will receive instructions from Citibank on how to receive their cash and BAT American Depositary Shares, said Dawn Brown, a certified financial planner with Lassus Wherley in New Providence.

“A representative from Citibank informed us that owners of Reynold American shares will receive tax forms for the transaction in 2017,” Brown said. “The tax form is created for the year in which the acquisition occurred and is not dependent on when the shareholder hands their certificate into BTI.”

You should look out for the form and provide it to your tax preparer when your 2017 taxes are being prepared, Brown said.

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This post was first published in January 2018.

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