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Pursuant to Rev. Rul. 71-233, payments of premiums by former policyholders of a mutual insurance company represented payments for insurance and investments in insurance contracts rather than investments in the underlying assets of the mutual company. Threfore, the policyholders have zero basis in their membership interests. This zero basis is carried over to the stock received by the former policyholders in exchange for their membership interests.
Accordingly, for gain calculation purposes you will be treated as having zero basis in the shares you received in the conversion from a mutual insurance company to a stock company. Prudential's investor relations FAQ site also mentions this at http://www.investor.prudential.com/faq.cfm.
Whether you may treat the gain as long-term or short-term depends on when you purchased the underlying contract that gave you the right to receive the shares. If you purchased the contract more then a year prior to the effective date of demutualization, then the gain will be treated as long-term for tax purposes subject to a maximum tax rate of 15% (5% if the gain would otherwise be taxed in the 10% and 15% brackets). Otherwise its treated as a short-term gain and to the extent not offset with capital losses, taxed as ordinary income.
Because it is impossible for me to identify and consider ALL the relevant facts, this advice is not intended or written to be used for the purpose of avoiding penalties, and cannot be used for that purpose.