As we wrap up the functional changes that we discovered during the Realized app beta testing, one new feature stands out. Early on, we saw that stock splits complicate the calculation of capital gains. One of the first features built into our automated tax lot setup included the handling of stock splits.

For any lot affected by a stock split, the Realized app will calculate the number of post-split shares. This requires no effort on the part of the user.

Mergers and tax lots needed a solution

During the beta test, we came across the merger of WYE (Wyeth) with PFE (Pfizer). The merger is actually a taxable acquisition using both PFE shares and cash boot.

We wondered how the thousands of WYE shareholders calculated the cost basis in their new PFE shares. Depending upon the cost basis for each of their pre-merger WYE tax lots, many had taxable capital gains, even though they sold no WYE stock. Some avoided the headache and passed the problem on to their tax accountants.

To provide our customers with full automation of the tax lot process, we went forward with adjusting tax lots for mergers. Going beyond the WYE/PFE merger, different merger types (either all stock, all cash or stock plus boot) require different handling. The end result: Realized will effortlessly maintain the cost basis for all tax lots, including stocks going through mergers.

No more headaches.

Public launch imminent

If all goes according to plan, next week we will begin a preview period during which anyone may setup a Realized account. To receive a notification when the preview begins, go to www.realized-app.com.