the 2018 tax bomb

hawkmountain

Mergers and acquisitions are taking their toll. Praxair and Linde merged in 2018. As a shareholder in PX, I am now required by the IRS to pay cap gains on the "proceeds". I don't have any proceeds: I have equal value shares in Linde.
What's up with this? Mergers have been a part of my port for many years and I was never hit by taxes.
My tax preparer hasn't a clue (time for a new tax guy). I am in touch with Fido private client section however.
Anybody facing a similar tax issue?

msf

Have you ever held stock of an American company that was merged into a foreign company and where the owners of the extinguished company received over half the value of the resulting company?

Consistent with Form S-4, the Merger will be reported as ... an exchange as described in Section 351(a) of the Internal Revenue Code of 1986 ... and a "reorganization" within the meaning of Section 368(a) of the Code for income tax purposes ... subject to the provisions of Section 367(a) of the Code since shareholders of Praxair common stock received more than 50% (by vote or value) of the stock of Linde plc.

https://www.praxair.com/-/media/corporate/praxairus/documents/reports-papers-case-studies-and-presentations/investors/praxair-form-8937-final-signed.pdf?rev=b386aced68424c8488d34edc75f138fe

Under Section 367(a) of the Code, if a US person transfers property to a foreign corporation in a Section 332, 351, 354, 356, or 361 transfer or exchange, the foreign corporation generally is not treated as a corporation for purposes of determining the US transferor’s gain on the transfer. This rule typically means that the US person will recognize gain on what would otherwise be a non-taxable transfer.

https://www.alstontax.com/new-regs-on-gain-recognition-agreement/

Crash

...Like I've heard before: "Corporations don't pay taxes..." Sucks. But people have to pay, whether the rules make any sense or not.