What are the U.S. federal income tax consequences of the distribution to Merck stockholders (cost basis)?
For Important U.S. Federal Income Tax Information concerning the Medco Health Solutions, Inc. Stock Distribution please click here for the shareholder letter. Based on the ruling that Merck received from the U.S. Internal Revenue Service, or IRS, you will not recognize a gain or loss on the receipt of shares of Medco common stock in the spin-off, except to the extent you receive cash in lieu of fractional shares. Your tax basis in your Merck common stock will be apportioned between your Merck common stock and the Medco common stock received in the distribution in accordance with their relative fair market values.
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