Stock Spin-Out

[nvsoar]

On 02/20/18 11:35, Les wrote:
> There is a stock-split function in GC.  However it doesn't appear to 
> do spin-outs.  In my case, the company doing the spin-out is doing a 5 
> to 1 and there are no fractional shares. I just assigned the cost at 
> 0.00 per share.
>
> Les
>
>
> On 02/20/2018 01:27 PM, David Carlson wrote:
>> Les,
>>
>> Usually a stock spin-off splits the before spin-off cost basis 
>> between the after spin-off stocks according to documents provided by 
>> the parent corporation to the SEC and shareholders which also explain 
>> how details such as fractional shares and various expenses are to be 
>> treated.
>>
>> The worksheet that nvsoar provided the link to helps with calculating 
>> details.
>>
>> I thought that there was also a stock split assistant built into 
>> GnuCash to construct the transactions. Check the help or tutorial 
>> manual s for that.
>>
>> David C
>>
>>
>>
>>
>> On Feb 20, 2018 9:57 AM, "Les" <lelliott5 at gmail.com 
>> <mailto:lelliott5 at gmail.com>> wrote:
>>
>>     Thanks for both replies.  I used a zero price and the number of
>>     shares with a description.  (John's procedure)  But I was not sure
>>     if the procedure I used was correct (best).
>>
>>     Regards,
>>
>>     Les
Comment:  It seems to me that a zero cost for the spun off shares is 
incorrect if a non-zero basis exists for the pre-spin off shares.  A 
zero cost for the new shares will result in a higher than necessary 
capital gain when those shares are sold.  The easiest way to determine 
the new basis for each of the remaining entities that I have found is to 
use the cost basis calculator at the link previously provided.
nvsoar