In early August of 2000, Ford Motor Company completed a recapitalization plan. Under the plan, a Ford stockholder had the right to exchange current stock for new stock, or to receive a combination of new stock and cash.

In addition to the information below, readers can find additional material at

trez_talk:Ford/Visteon spin-off 
http://www.bivio.com/trez_talk/mail-msg?t=3665000003

Ford Recapitalization - All Stock Option 
http://www.bivio.com/trez_talk/mail-msg?t=3785300003

TheStreet.Com
http://www.thestreet.com/funds/taxforum/1018631.html

Ford Motor Company home page
http://www.ford.com/

Under the non-cash option, each old share of Ford stock received 1.748 shares of new Ford stock. Receipt of this stock is similar to a stock split. The basis of the old stock will be allocated over the new shares received. The gain on any fractional shares should be treated as a capital gain.  See Certain U.S. Federal Income Tax Consequences of the Recapitalization, which appears later in this document and which was taken from the Ford registration statement with the SEC, 

If the cash option was selected, the transaction becomes taxable. Taxable gain will have to be reported on the lesser of the cash received or the gain realized in the exchange. Such gain would be computed by adding the fair market value of the new shares received to the cash received and deducting the tax basis for the old shares. It is important to reflect the Visteon spin-off before making this calculation. 

Certain U.S. Federal Income Tax Consequences of the Recapitalization (page [ ]) 
In the opinion of Skadden, Arps, Slate, Meagher & Flom LLP, which is based upon representations of the Company, the recapitalization should constitute a “recapitalization” of the Company within the meaning of Section 368(a)(1)(E) of the Internal Revenue Code. In general, for U.S. federal income tax purposes, (i) a stockholder who exchanges each share of such stockholder’s stock for a combination of cash and new stock should recognize capital gain (but not loss) to the extent of the lesser of the cash received or the gain realized by such stockholder in the exchange, provided that such stockholder does not constructively own any shares, has a minimal interest in the Company (an interest of less than 1% should satisfy this requirement) and exercises no control over corporate affairs, (ii) a stockholder who exchanges all of such stockholder’s stock solely for new stock should not recognize gain or loss, and (iii) a stockholder who exchanges all of such stockholder’s stock solely for cash and does not constructively own any shares, should recognize capital gain or loss in an amount equal to the difference between the cash received and such stockholder’s adjusted tax basis in the shares surrendered in the recapitalization. However, the U.S. federal income tax consequences for a particular stockholder will depend upon such stockholder’s particular facts and circumstances, and in certain cases, cash received pursuant to the recapitalization may be taxable as ordinary dividend income. For individual taxpayers, long-term capital gains are generally subject to tax at a maximum U.S. federal income tax rate of 20%, while ordinary dividend income may be subject to tax at a maximum U.S. federal income tax rate of 39.6%. In addition, the deductibility of capital losses is subject to limitations for both individuals and corporations. Because the tax consequences of the elections will depend upon each stockholder’s individual circumstances, stockholders should consult their tax advisors for a full understanding of the tax consequences to them of the recapitalization and the elections available to them.