Tax Implications to Universal American Shareholders of Sale of Part D Business
On April 29, 2011 the Company closed the sale of its Medicare Part D business to CVS Caremark Corporation. For U.S. tax purposes the transaction is considered a taxable sale of the “old” Universal American stock in which shareholders received $14.00 in cash and one share of “new” Universal American valued at $9.245. The sale to CVS should be reported as a taxable sale with proceeds equal to $23.245 for each share of old Universal American held at the time of the sale.
Summary tax information regarding the Part D sale:
•Fully taxable transaction
•Sales price consists of two parts
-Cash of $14.00 per share
-Share of “new” Universal American Corporation valued at $9.245
•Total sales price equals $23.245 per “old” share of Universal American Corp.
•Basis in “new” Universal American Corp. equals $9.245 per share
•Holding period (for long term capital gain determination) restarts on April 30, 2011
Please see your personal tax advisor to determine how this information should be used on your personal tax return. This information is meant as general information only.