Section 302 treatment of merger payment

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canuck20
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Joined: Mon Jun 05, 2017 12:08 pm

Section 302 treatment of merger payment

Post by canuck20 »

My Canadian broker sent me a "Section 302 certification of treatment of merger Payment" to fill in. Problem is I can't find any simple examples of how to complete the form and definitions of what X, Y and Z are. As background, on Dec 28.2018 Dell acquired DVMT stock through a merger. I had elected to get 100% cash for the 100 DVMT shares I owned, thinking this would be classed as a stock sale. Instead, I got 64 shares of DELL (W on the form?) and some US cash. The broker treated the cash as an American dividend and withheld US tax. If I fill out form 302 is it possible the cash could be shown to not be a dividend? I am a Canadian citizen and never make enough income to be able to claim a foreign tax credit on Canadian tax form. I don't file US taxes. I do have capital losses to claim. Any suggestions how this dividend versus capital gain should be handled? An example of how X, Y and Z are calculated would be very helpful. I appreciate any advice.
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