Company: LBRDK
Filing Date: 2025-01-22
Form Type: DEFM14A
Source: 0001140361-25-001609
Chunk: 302

Company: Liberty Broadband Corp
Filing Date: 2025-01-22
Form: DEFM14A
Chunk 302
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 manner in which any shares of GCI spinco treated as received in the GCI divestiture should be allocated among different blocks of shares of Liberty Broadband common stock, and with respect to identifying the bases and holding periods of the particular shares of Charter capital stock received. A U.S. holder that receives cash in lieu of a fractional share of Charter Class A common stock will generally be treated as having received the fractional share pursuant to the combination, and then as having sold such fractional share for cash. As a result, such U.S. holder will generally recognize gain or loss equal to the difference between the amount of cash received and the tax basis allocated to such fractional share of Charter Class A common stock. Such gain or loss generally will be long-term capital gain or loss if, as of the effective date of the combination, the holding period for such fractional share (as described above) exceeds one year. The deductibility of capital losses is subject to limitation. If, at the time of the combination, a dividend has been declared but not yet paid with respect to the Liberty Broadband preferred stock, a portion of the Charter rollover preferred stock received in exchange for the Liberty Broadband preferred stock that is attributable to the amount of the declared but not yet paid dividend will be treated as a distribution with respect to the Liberty Broadband preferred stock. Such a distribution will be taxable as a dividend to the extent of (i) Liberty Broadband’s current earnings and profits for the taxable year in which the combination occurs and (ii) Liberty Broadband’s accumulated earnings and profits. Any amount distributed in excess of Liberty Broadband’s earnings and profits (current or accumulated) would generally be a return of capital that reduces such U.S. Holder’s adjusted tax basis in their Liberty Broadband preferred stock, with any distributed amount in excess of such basis generally treated as gain from the sale or exchange of property. To the extent that a U.S. holder’s shares of Liberty Broadband preferred stock are classified as “section 306 stock” within the meaning of Section 306 of the Code, the shares of Charter rollover preferred

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stock received by such holder in the combination will also constitute “section 306 stock.” It is possible that a U.S. holder’s Liberty Broadband preferred stock is classified as “section 306 stock” if such holder received such Liberty Broadband preferred stock in the acquisition of GCI Liberty by Liberty Broadband in exchange for preferred stock of GCI Liberty that was treated as “section