WALTHAM, Mass.--(Wolters Kluwer Financial Services are sharing their predictions with the company’s annual Top 10 Corporate Actions list, which highlights corporate events from the past year that pose challenging tax consequences.)--Which corporate actions might cause headaches for investors this tax season? The tax and legal experts at
“Cost basis reporting by brokers on Form 1099-B that began last year and the required basis adjustments for corporate actions reported on new IRS Form 8937 has made the proper reporting of corporate actions even more important this tax season”
“Mergers were definitely in focus in 2012 and that’s an area taxpayers, as well as financial and tax advisors, should continue to pay attention to as we move forward this year,” said John Kareken, senior analyst for Capital Changes at Wolters Kluwer Financial Services. “We will likely see more merger activity as recovery from the financial crisis continues, and also regulatory changes that have tax planning consequences, so there will almost definitely be new or unusual tax issues that need to be accounted for.”
“Cost basis reporting by brokers on Form 1099-B that began last year and the required basis adjustments for corporate actions reported on new IRS Form 8937 has made the proper reporting of corporate actions even more important this tax season,” said Richard Ryndak, senior product manager for Capital Changes at Wolters Kluwer Financial Services.
The Top 10 List for 2012 was selected based on voting by corporate actions professionals, as well as other criteria, such as how widely held the affected security was and how complex the tax issues were. This year’s list is comprised of six U.S. transactions and four international transactions, including a group of “domestication events” that represent a trend of foreign corporations reincorporating back into the U.S.:
1. El Paso Corporation (Merger into Kinder Morgan)
2. Sunoco (Merger into Energy Transfer Partners)
3. Sara Lee (Spinoff of international coffee and tea business)
4. Atlas Energy (Distribution of interest in Atlas Resource Partners)
5. Aon Corporation (Reorganization as U.K. domiciled company)
6. Kraft Foods (Spinoff of Kraft Foods Group)
7. Brasil Telecom/Oi SA (Corporate restructuring)
8. Tyco International (Distribution and merger)
9. ASML NV (Reverse split and cash distribution)
10. “Domestication Events”
Details about each corporate action and why it is particularly challenging will be presented during the web seminar, “Top 10 Corporate Actions of 2012,” which will be held Wednesday, Jan. 16, 2013.
About Wolters Kluwer Financial Services
Whether complying with regulatory requirements, addressing a single key risk, or working toward a holistic risk management strategy, more than 15,000 customers worldwide count on Wolters Kluwer Financial Services for a comprehensive and dynamic view of risk management and compliance. Wolters Kluwer Financial Services provides audit, risk, finance and compliance solutions that help financial organizations improve efficiency and effectiveness across their enterprise. With more than 30 offices in 20 countries, the company’s prominent brands include: FRSGlobal, FinArch, ARC Logics for Financial Services, Bankers Systems, VMP® Mortgage Solutions, AppOne®, GainsKeeper®, Capital Changes, NILS, AuthenticWeb™ and Uniform Forms™. Wolters Kluwer Financial Services is part of Wolters Kluwer, a leading global information services and solutions provider with annual revenues of (2011) €3.4 billion ($4.7 billion) and approximately 19,000 employees worldwide. Please visit our website for more information.