the cost basis of the new DIS shares will be $0, but there's no real capital gains impact -- if you have long-term MVL shares, the long-term basis carries forward to the DIS shares.

For this quick example, you have 100 LT MVL shares bought at $10, DIS is worth $30 at time of exchange, and I'm rounding up to .75 DIS shares. A $50 MVL sellout option is used.

100 MVL shares bought at $10 = $1000. You could sell today at $50 for $5000 and pay the 15% cap gains on your $4000 profit... $600 tax.

If you hold the 100 MVL til exchange, you get $3000 + 75 DIS shares. You pay tax on the $2000 cash profit, or $300. Your DIS shares now have a basis of $0; if you sold immediately at $30, you'd get $2250, and tax would be about $338.

So $638 vs. $600 in tax... but that's only because you make a bit more on the DIS deal, in this example $4250 vs. $4000. The longer you would hold MVL, the smaller that spread will get.

-KJ, just beat Marvel - Ultimate Alliance 2 on Anti-Reg. Game is 'good' if you're a MVL fan, 'average' if you're not.