>>Does anyone else share my  predicament?

>>I can't remember when, but I received shares of  Travelers (2 shares TAP 
A and 4 Shares TAP B) as a spin-off from Citigroup,  C.  

On or about August 20, 2002. Full details can be found here: 
_http://www.citigroup.com/citigroup/fin/data/tap_tax_basis.pdf_ 
(http://www.citigroup.com/citigroup/fin/data/tap_tax_basis.pdf) 
 
>>On April 7 & 8, 2004 the above shares were removed from my  account and 
replaced with ~$68 cash in lieu and one whole share of STA. 
 
>>I'm guessing that I could report the $68 as a long term capital  
gain--like I sold the Travelers with a cost basis of zero, but is this  
proper?

You could, but it's not really proper. The link I gave above will show you  
how to determine your actual cost basis in TAP.A and TAP.B
 
>>St. Paul Travelers provided a "Statement to be Attached to  Sharholder's 
Tax Return Pursuant to Regulation Section 1.368-3(b)"   which contains 
blanks for me to enter the share amounts and cost basis  info.
Must I file a paper return this year with the above attachment?
I  would prefer to file electronically.

Some software will allow you to e-file with attachments such as this, other  
software will not. If your software doesn't allow you to do so, you are left  
with two choices: file on paper, or e-file without the statement. I'm don't  
know what the consequences are for not including the statement, but I do  know 
that I have forgotten to include the statement on some returns I've filed  in 
the past and have never heard about it. 
 
Ira Smilovitz
 
 

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