Replies to post #271725 on NorthWest Biotherapeutics Inc (NWBO)

[vator]

If MRK buys your shares in any format, cash or stock, it is a capital gain on your shares. NWBO shares are closed out and at that price you are taxed.

[vator]

If you held shares converted to MRK shares that is your new basis after paying tax on NWBO shares.

[hyperopia]

tryn2, If MRK bought NWBO with MRK shares, the exchange wouldn’t happen overnight. The deal would be announced but the closing of the transaction wouldn’t happen for at least a month or two. In your hypothetical situation, with MRK trading at say $70 on the day of the announcement, that would mean that NWBO shares would be worth 1/4 of MRK or $17.50. NWBO would likely begin trading close to that price (around $17) from the day of the announcement until the close of the transaction a month or more later. You are free to sell them at the current price or simply continue to hold them. On the day of the announced close of the transaction, then MRK shares will be exchanged in your account for NWBO.

For purposes of capital gains, the cost basis on the new MRK shares is the same as the cost basis on the former NWBO shares. Assuming they are held in a taxable account, if you should decide to sell them at that point, the gains from the sale would be taxed at the long-term capital gain rate, since you held the original NWBO shares over 1 year. Basically, the first $450,000 is taxed at 15% and the rest is taxed at 20%.