Consider a person with 10,000 shares of SolarCity stock. Assume that Tesla stock is
trading at $224.84 when
the merger is completed.
a. How many Tesla shares will this person receive?
b. Suppose the person had a $10 per share basis in her SolarCity stock. How
much taxable gain or loss will the person recognize at the time of the merger?
c. What basis per share will the person take in the Tesla stock received?
d. Will the tax basis this shareholder takes in the Tesla stock received be larger,
smaller, or equal to it market value? By how much?
a.The person will receive 10,000 Tesla shares. The share ownership during the merger does not... View the full answer