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Pawche  
#1 Posted : Wednesday, December 11, 2019 1:43:09 AM(UTC)
Pawche

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The merger of Celgene(CELG) with Bristol Myers Squibb(BMY) had a twist in that 2 securities were received as part of the merger consideration. This is a merger with cash that is fully taxable. (These are much easier to enter using Myiclub.com.) For tax purposes it is treated as a sale of Celgene for the total value of cash and securities received. This is then followed by a purchase of the securities. In this instance, the second security can be treated as cash when entering the transaction.
Full details for entering this in Club Accounting 3 and Myiclub.com can be found on the ICLUBcentral web site at:
https://www.iclub.com/faq/Home/Article?id=655&category=27&parent=26

The instructions do warn that the ticker symbol for the rights is not included in ICLUBcentral price downloads. You will need to manually enter a price for BMYRT when entering a valuation. Bigcharts does give historical prices for BMYRT. http://bigcharts.marketwatch.com/

Russell

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Pawche  
#2 Posted : Monday, January 6, 2020 4:09:39 PM(UTC)
Pawche

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Update on this merger
Some brokers list the BMYRT rights as Cash-Other on their statements. I believe this is because the rights give owners the right to receive a cash payment in the future if certain conditions are met. BMYRT do trade as a security on an exchange and the price fluctuates. For accounting ease, treat the rights as a security as stated in the instructions for entering the merger. You will need to hand enter the price for BMYRT as the ICLUB data source does not include the ticker BMYRT. Myiclub will use the previous price entered when it cannot find the symbol in a price download. The treasurer will need to edit the valuation to enter the new price.
Go to Accounting> Securities> Edit/Delete Valuation. Choose the valuation date you want to edit and finally enter the new price for BMYRT or other appropriate security.
The tax consequences of income from the rights is a bit complex. According to the document filed with the SEC, if the rights are sold before they expire or the cash payment is received, the gain is treated as a capital gain, just like any other security. However, if the rights are held and the cash payment promised in the rights is received, then the amount over the cost basis of the rights will be treated as interest income.

Russell Malley
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