Capital One completed its merger with Discover Financial Services on 18 May 2025. Discover shareholders received 1.0192 shares of Capital One stock for each DFS share.

The Capital One Form S-4/A SEC filing for this merger can be found through the SEC EDGAR web site at: https://www.sec.gov/Archives/edgar/data/927628/000119312525001580/d743340ds4a.htm#toc743340_2

The tax consequences for shareholders begins on page 135.

The companies received an opinion from a law firm that the merger qualifies as a non-taxable reorganization. We will assume the IRS does not dispute this opinion and we will treat this merger as a simple merger in myICLUB. The information below is based on the information available from a form S-4/A filed with the SEC. Price information is from websites offering historical prices.

NOTE: The companies state they will endeavor to satisfy the conditions necessary to make this transaction non-taxable and may get legal advice that the transaction qualifies for non-taxable treatment. However, there is the possibility the IRS will disagree with their characterization. These instructions assume the companies succeed in their efforts. New instructions will be written, if and when it becomes known the merger should be treated as a taxable event.

The Merger Entry Go to Accounting > Securities > Record merger of securities in myICLUB. If you are unfamiliar with merger transactions you can get help at this URL: https://www.myiclub.com/faq/article.aspx?id=52

Here is the information needed to complete the merger entry in myICLUB.

Step 1

• Date: 5/18/2025
• Merging Company: Discover Financial Services (DFS)
• Number of daughter companies : 1 (keep this default)

Step 2

• Symbol of new company: COF (Capital One)
• Shares received : 1.0192 x (# of DFS shares owned).
  • (Remember to include fractional shares.)
  • For example, if you owned 100 DFS shares, you should receive 1.0192 x 100 = 101.92 COF shares.
• Price per share: 197.41   (Closing price on 5/19/2025 as 5/18 was a Sunday)
• Cash received:  See your broker statement for cash-in-lieu

Any fractional share entered will be sold for the cash amount entered as part of the merger transaction. No need to enter a separate sell transaction. If no cash amount is entered, the fractional share will remain in your portfolio.

Save the transaction and the merger has been entered.