Tim Hortons / Burger King merger


A

Art Matz

Before the merger, I owned Tim Hortons stock.
For each share I owned I got approx. $55.83 in cash and approx. 0.82 shares
of Restaurant Brands International stock and cash in lieu of fractional
shares.
According to the literature I received, my capital gains will be the lesser
of either 1) (Cash received + fair market value of shares received) minus
my cost basis or 2) Cash received.
In my case the total cash received is less. So, I figure all the cash needs
to be taxed as gains and my cost basis for my Hortons stock will be my cost
basis for the new stock.

What would the transactions be for entering this into Quicken?
 
R

R. C. White

Hi, Art.

You probably will need to wait a few days - or weeks - for an official
explanation of the details of the merger transaction. The best place to
look might be on the Investor Relations page of the former Burger King
website:
http://investor.bk.com/conteudo_en.asp?idioma=1&tipo=43682&conta=44&id=165734&storyId=72258583

Are you a citizen/resident of Canada? Or of the USA? It probably makes a
LOT of difference and you didn't mention it.

I'm not familiar with this merger, but from information on the web, this
seems to be somewhat more complex that a typical merger. A new corporation,
Restaurant Brands International Inc. (TSX, NYSE: QSR), was created and both
BKW and THI became subsidiaries on the new corporation. The news release
does not say whether the transaction is taxable to either US or Canadian
taxpayers.

The press release does say:
More information on the transaction can be found in the joint information
statement/circular of Burger King Worldwide and Tim Hortons filed with the
U.S. Securities and Exchange Commission and on Tim Hortons SEDAR profile
on November 5, 2014. An early warning report with respect to the
transaction will be filed electronically on Restaurant Brands
International’s SEDAR profile, available at www.sedar.com
I suggest that you "stand by" and wait for advice from the lawyers and
accountants who are being paid large fees to explain all this to
shareholders. (I know it's frustrating; I have shares in Kimberly Clark,
which recently spun off Halyard Holdings, Inc., and I'm still waiting for
definitive information to file my US tax return. And Quicken 2015 does NOT
make it easy to record this transaction.)

RC
-- --
R. C. White, CPA
San Marcos, TX
(Retired. No longer licensed to practice public accounting.)
(e-mail address removed)
Microsoft Windows MVP (2002-2010)
(Using Quicken Deluxe 2015 R3 and Windows Live Mail in Win8.1 x64)


"Art Matz" wrote in message

Before the merger, I owned Tim Hortons stock.
For each share I owned I got approx. $55.83 in cash and approx. 0.82 shares
of Restaurant Brands International stock and cash in lieu of fractional
shares.
According to the literature I received, my capital gains will be the lesser
of either 1) (Cash received + fair market value of shares received) minus
my cost basis or 2) Cash received.
In my case the total cash received is less. So, I figure all the cash needs
to be taxed as gains and my cost basis for my Hortons stock will be my cost
basis for the new stock.

What would the transactions be for entering this into Quicken?
 
Ad

Advertisements

A

Art Matz

I'm a U.S. Citizen. Before the merger took place, I got very large book
explaining the merger.

There was Q&A in the book.

Q: What are the U.S. federal income tax consequences of the transactions to
holders of Tim Hortons common shares?

A. (clip from the answer that relates to my situation)

In the case of a U.S. holder of Tim Horton common shares who receives a
combination of cash (including any cash received in lieu of a fractional
Holdings common
share) and Holdings common shares in the arrangement.
(A) if the sum of such cash (including any cash received in lieu of a
fractional Holdings common share) and the fair market value of such Holdings
common shares is greater than such U.S. holder's adjusted tax basis in the
Tim Hortons common shares exchanged, then such U.S. holder should recognize
gain equal to the
lesser of (i) the amount by which the sum of such cash and fair market value
of such Holdings common shares
exceeds such U.S. holder's adjusted tax basis in such U.S. holder's Tim
Hortons common shares; and (ii) the
cash received by such U.S. holder in the arrangement

Since (A) was true and (ii) was the lesser. This is what I was going on at
least unless I find out differently. If this is the case I just not sure how
to enter it into Q.

As you stated R.C., I usually find a document on their website how to
distribute cost basis.
 

Ask a Question

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments. After that, you can post your question and our members will help you out.

Ask a Question

Top