# Capital Gain or Loss Calculation for Mergers & Acquisitions (Canada)

I have a question about calculating capital gains/losses for mergers and acquisitions in which fractional shares and cash are provided as part of the transaction. What part should be listed as capital gain/loss given my adjusted cost basis (ACB) and what I received as part of the M&A? This is for US-based stocks.

In this case, CompanyA was acquired by CompanyB. Say I had 50 shares of CompanyA at \$30 per share. Ignoring the commission, the ACB is

``````\$30 USD * 50 = \$1,500 USD
``````

On the acquisition, I received 10 shares of CompanyB at \$25 USD and \$10 USD per CompanyA share. The value of this transaction is

``````\$25 USD * 10 + \$10 USD * 50 = \$750 USD
``````

Would I report a capital loss of \$1,500 USD - \$750 USD = \$750 USD? Or would I report the cash part of the merger (\$10 USD * 50 = \$500 USD) as a capital gain, then deal with capital gain/loss later when I sell the CompanyB shares? For example,

``````Capital gain now:          \$500 USD
Capital gain/loss later: \$1,500 USD - CompanyB settlement price on sale * 15 shares = ???
``````

Any insight you can provide is greatly appreciated. Thanks in advance!