When a corporation is bought by another company for cash it is referred to as a cash merger. It is fully taxable as an outright sale. The acquiring company makes a tender offer to all shareholders of the target company.
If enough shareholders accept and other conditions of the tender offer are met, the cash merger goes to closing and every shareholder receives identical cash sales proceeds shortly thereafter.
Cash mergers are always fully taxable and holders recognize a capital gain or loss.
You can use our cash merger calculator to verify the sales proceeds you received on recent cash mergers and to calculate your capital gain or loss. You can also input your own data.
If you know of other cash merger transactions, please e-mail the details to us at firstname.lastname@example.org so that we can include it in our free database for the benefit of all users.
Click on the image below to access the Cash Merger Calculator
Cash Merger Calculator
Information provided is intended solely for cash-basis U.S. citizen individual taxpayers and is believed to be accurate for most cases but is not guaranteed. Always consult your personal tax advisor about your own situation. Suggestions are most welcome. Please email our webmaster @ costbasis.com with your comments. If this website has been helpful to you, please consider making a donation to support our efforts.