The Raytheon reorganization’s stock conversion and tax basis rules depend on which legacy share you held on April 3, 2020. Former United Technologies (UTX) shareholders came out of the transaction owning three stocks: Raytheon Technologies (now RTX Corporation), Carrier Global (CARR), and Otis Worldwide (OTIS). Former Raytheon Company (RTN) shareholders came out owning one: RTX. In both cases the reorganization was structured to be tax-free, but your original cost basis did not vanish. It was split or carried over, and you need the correct numbers before you sell.
What Former UTX Shareholders Received
If you held UTX stock as of the record date of March 19, 2020, each UTX share entitled you to one share of Carrier Global (CARR) and 0.5 shares of Otis Worldwide (OTIS) through the spin-off. Your UTX shares themselves then converted one-for-one into shares of the new combined company, RTX.1RTX Investor Relations. Attachment to Form 8937 – Part II Report of Organizational Actions Affecting Basis of Securities
So 100 shares of UTX became 100 shares of RTX, 100 shares of CARR, and 50 shares of OTIS. All three began trading on the New York Stock Exchange on April 3, 2020.2RTX. Raytheon and United Technologies Obtain All Regulatory Approvals to Close Merger of Equals
What Former RTN Shareholders Received
Former Raytheon Company shareholders went through a straight stock-for-stock exchange. Each RTN share converted into 2.3348 shares of the new RTX common stock. A holding of 100 RTN shares produced roughly 233 RTX shares.3SEC. Acquisitions, Dispositions, Goodwill and Other Intangible Assets
RTN holders did not receive Carrier or Otis shares. The spin-offs happened immediately before the merger closed, so only UTX holders of record on March 19, 2020 received CARR and OTIS distributions.4Raytheon Technologies Corporation. Form 8-K
The 2023 Rename to RTX Corporation
If your account statement now shows “RTX Corporation” rather than “Raytheon Technologies,” they are the same company. The name changed on July 17, 2023. The ticker stayed RTX and the CUSIP number did not change, so brokerage accounts updated automatically with no effect on the number or value of your shares.5RTX. Corporate and Business Headquarters
Allocating Cost Basis if You Held UTX
This is the step most shareholders skip and later regret. Because the spin-off qualified as a tax-free distribution under Internal Revenue Code Section 355, your original UTX cost basis did not disappear at the split. It was divided among your RTX, CARR, and OTIS shares in proportion to their fair market values immediately after the distribution.6Office of the Law Revision Counsel. 26 U.S. Code 355 – Distribution of Stock and Securities of a Controlled Corporation
RTX published a Form 8937 with the official allocation percentages:1RTX Investor Relations. Attachment to Form 8937 – Part II Report of Organizational Actions Affecting Basis of Securities
- 55.17% of your original UTX cost basis goes to your RTX shares
- 18.69% goes to your Carrier (CARR) shares
- 26.14% goes to your Otis (OTIS) shares
A worked example. Say you bought 100 shares of UTX at $120 per share, so a total basis of $12,000. After the reorganization, $6,620.40 becomes your RTX basis, $2,242.80 becomes your CARR basis, and $3,136.80 becomes your OTIS basis. Since 100 shares of UTX produced 50 shares of OTIS, your per-share OTIS basis is $3,136.80 divided by 50, or $62.74.
If your broker processed the conversion in a standard account, these figures may already appear in your cost basis records. Check them anyway. Brokers sometimes apply different rounding, misallocate across tax lots, or miss the split entirely, particularly if you accumulated UTX over multiple purchases.
Cost Basis if You Held RTN
The math is simpler for former Raytheon Company holders. In a tax-free stock-for-stock exchange, your total RTN basis carries over intact to your RTX shares. If you paid $10,000 all-in for RTN, your total basis in the RTX shares you now hold is still $10,000, just spread across more shares because of the 2.3348 ratio.
To get your per-share RTX basis, divide your original total RTN basis by the number of RTX shares you received. 100 RTN shares at $100 per share ($10,000 total) becomes 233.48 RTX shares at roughly $42.83 each. If you received cash for the 0.48 fractional share, subtract the portion of basis allocable to that fraction before dividing.3SEC. Acquisitions, Dispositions, Goodwill and Other Intangible Assets
Cash for Fractional Shares Was Taxable
The rest of the reorganization was tax-free, but this piece was not. Neither the spin-off nor the merger issued actual fractional shares. The half-share of OTIS from the spin-off and any fractional result from the 2.3348 exchange were sold on the open market, and shareholders received cash instead.4Raytheon Technologies Corporation. Form 8-K
That cash payment was a taxable event in 2020. The gain or loss equals the cash received minus the portion of your cost basis allocable to the fractional share. If you held the original stock for more than a year before the transaction, the gain qualified for long-term capital gains rates.
Your Holding Period Carries Over
Under 26 U.S.C. § 1223, a distribution qualifying under Section 355 is treated as an exchange, and the holding period of your original stock carries over to the new shares. If you bought UTX in 2015, your CARR and OTIS shares inherited that 2015 start date. The same rule applies to the RTN-to-RTX conversion.7Office of the Law Revision Counsel. 26 U.S. Code 1223 – Holding Period of Property
In practice, that means a sale today almost certainly qualifies for long-term capital gains treatment, which is taxed at lower rates than short-term gains. If your broker’s records show an April 2020 acquisition date for your CARR, OTIS, or RTX shares, that is an error worth correcting before you sell.
If You Still Hold Paper Certificates
Old UTX or RTN certificates cannot be traded on the open market, and most brokerages will not accept them without conversion. If you are a registered shareholder — meaning your name appears directly on the company’s records rather than being held through a broker in “street name” — contact the transfer agent, Computershare Investor Services:8RTX. Transfer Agent
- U.S. callers: 1-800-488-9281
- International callers: 1-781-575-2724
- Online: computershare.com
If your shares were held in street name, contact your broker instead. Do not sit on this. States require financial institutions to turn dormant accounts over to unclaimed property divisions after a period of inactivity, typically around five years for stock and dividends. The reorganization is now more than five years old, so some accounts are approaching that threshold. Once shares are escheated, recovery involves filing a claim with the state and possibly paying a fee to a third-party locator.
The Amended Return Window for 2020 Has Closed
If you failed to report the cash-in-lieu payment on your 2020 return or used the wrong cost basis, the normal window to file an amended return for a refund has closed. The IRS generally allows three years from the original filing deadline, and for 2020 returns that deadline was April 15, 2024.9Internal Revenue Service. File an Amended Return
That does not mean you are stuck with wrong basis records going forward. The allocation percentages above still apply to the shares you hold today. If you sell RTX, CARR, or OTIS in a future tax year, you need the correct allocated basis then to calculate the gain or loss. Fix the numbers now, even if you cannot amend the old return. A tax professional can help reconstruct the basis if your original records are incomplete.