Brookfield Corporation completed its merger with Triton International on 9/28/2023 for cash and BIPC stock. Triton International shareholders were to receive $68.50 in cash plus 0.3895 BIPC share for each TRTN share. The transaction is a taxable event. For tax purposes this is treated as a sale of TRTN followed by a purchase of BIPC from some of the proceeds of the sale. Gain or loss will be realized based on the total value of the cash and stock received and the cost basis of the TRTN shares.
In Merger with cash transactions, realized capital gains and the cost basis of the new shares have a component dependent on the price per share chosen in the entry screens. In our
experience brokers tend to use the price per share published by the companies on their websites in their guidance to shareholders. If the companies publish guidance with a share price, we use that share price in our instructions to minimize possible differences between the accounting records and broker information. In cases where no guidance is available, we will choose the lower of the opening or closing price on the effective date. Either of these prices is acceptable to the IRS and by choosing the lower price some realized capital gains will be deferred to a later date. There is always the chance the price we choose will not be the price chosen by your broker.
The gain from the merger and cost basis of the new shares recorded in your accounting records will then differ from your broker information. Because of the lack of detail in the tax code, both our choice and your broker’s choice would be reasonable estimates of market value for the shares received. Your records are NOT incorrect because they differ from your broker. Tax return forms do have specific areas to report these usually small differences. Our tax printer software handles these adjustment entries automatically in the normal operation of the software.
Resolution: For Triton International shareholders this merger is a cash-plus-stock reorganization. Information for these instructions is from SEC filings and websites offering historical stock prices.
Instructions for myICLUB Users.
Use the Merger with cash transaction.
Step 1
Date – 9/28/2023
Merging Company – TRTN (Triton International)
Step 2
Be sure to choose the option Transaction is fully taxable.
Cash per share received: 68.50
Exchange ratio of new to old shares: 0.3895
Price per share of new shares on merger date: 35.79 (Opening price on 9/28/2023)
Reorganization Fee: See your broker statement
Symbol of New Company: BIPC
Shares received and Price per Share should auto-fill from information above.
Cash Received: See your broker statement for cash-in-lieu amount
