MERGER: Nextel to Sprint Nextel

Issue:

On 8/17/05, Nextel Merged with Sprint to make Sprint Nextel

Cause:

This is a merger with both stock and cash.

Resolution:

Terms of the Merger: 1.26750218 share Sprint Nextel and 0.84629198 cash per 1 shares NexTel
Merge Date: 08/17/05

Let's assume you have 100 shares of Nextel.
This will result in 126.750218 shares of Sprint Nextel
This will also result in 84.63 in cash.

Cost basis of Nextel Shares: x,xxx.xx (depends on share price)

Total consideration of Merger:

1.26750218 SprintNextel * 26.15 = 3314.52
100 Nextel Shares * 0.84629198 = 84.63
Total consideration received: 3399.15

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There are three sub-scenarios:

(1a) If the club's cost basis in Nextel was less than $3314.52 (that is, less than $33.03/share), ALL the cash received is reported as a Short or Long Term Capital Gain distribution (based on holding period).

(1b) If the club's cost basis in ADVP was more than $3314.52 (that is, more than $33.14/share) but less than $3399.15 (that is, less than $33.99/share) then the gain (the difference between the $3314.52 and the old cost basis) is entered as a Short or Long Term Capital Gain distribution (based on holding period), and the difference between $84.63 (cash received) and the GAIN is entered as Return of Capital.

(1c) If the club's cost basis in the ADVP was more than $3399.15 (that is, more than $33.99/share) then the merger is a "loss". The cash received ($84.63) is entered as a Return of Capital.

Enter the capital gain and/or return of capital against Nextel the day BEFORE the merger.

2) Next, enter the merger of Nextel to Sprint Nextel on the merger date of record. Include the fractional share from your calculations AND include the cash received for the fractional share.

3) If you were charged a reorganization fee for the merger, enter this as a Cash Distribution Type Return of Capital for a NEGATIVE dollar amount against Sprint Nextel the day AFTER the merger.