MERGER: Ingersoll-Rand [IR] and Trane [TT] - taxable

Issue:

On 6/5/2008, Trane Inc. [TT] was merged into Ingersoll-Rand Company Limited [IR].

Cause:

This merger is not a typical cash plus stock reorganization. It is a completely taxable transaction. This opinion can be verified by reading the documents at http://investor.shareholder.com/ir/secfiling.cfm?filingID=1193125-08-46464

For each TT share, shareholders received $36.50 in cash and 0.23 shares of IR common stock.

Resolution:

This merger will be accounted for as a sale of the TT stock and a purchase of IR stock. The total merger consideration can be computed as the sum of the cash received plus the value of the IR shares received, plus any cash received for fractional shares. IR closed at $43.83 on 6/5/2008.

1) Calculate the total merger consideration:

a) Multiply IR shares received by 43.83 = ____________
b) Cash received @ 36.50 times the number of TT shares owned = ____________
c) Cash in lieu of fractional shares, if any = __________________________
d) Total merger consideration (1) + (2) + (3) = _______________________

2) Next. enter a sale of all TT stock for the total merger consideration computed in (1d), above, rounded to two decimal places.

3) Finally, enter a purchase of the number of IR shares received for the purchase amount computed in (1a), above, rounded to two decimal places.

Note: If the broker charged a Reorganization Fee, you can either deduct that as a commission against the sale of the TT stock, or add it as a commission on the purchase of the IR shares.