We currently hold stock A. Stock A is exchanged for Stock B, with an unequal number of shares. How do I post this? We are not selling Stock A, merely tendering it for a different stock, retaining the same holding period and basis.

1) Sell the old stock at cost.

2) Buy the new stock for the same amount as the cost of the old stock. This way there is no change in the cash balance. Also the new stock has the same cost basis as the old stock. Use the purchase of the old stock since it is an exchange.

3) Lastly since the old stock should not appear on the Schedule D, then change the tax code of the old stock to "no tax effect.