Stock Spin-Out

[Les]

Thanks Tommy for your input.

There was not any information on either the spun-out company or the 
company that did the spin-out. (both companies are Canadian stocks.)

I have sent email to both companies to determine my basis.


On 02/21/2018 11:59 AM, Tommy Trussell wrote:
> On Tue, Feb 20, 2018 at 10:02 PM, nvsoar <nvsoar at charter.net> wrote:
>> 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
>>
>>
> Usually here in the US, when a company announces a stock spin-off, the
> existing shareholders are provided a passel of materials, some of which
> include a determination by a tax attorney or the IRS describing how to
> calculate the basis of the spun-off shares. You can usually find the
> information at the spun-off company's web site (look for a link for
> "investor information") or as a document available from the company's stock
> transfer agent.
>
> I can imagine that sometimes such information may not be finalized at the
> time of spin-off, especially if the IRS objects to some part of it, but my
> impression is that these things are almost always pretty much settled
> before the time they occur because there's lots of money involved. And
> nobody wants any uncertainty when there's lots of money involved...
>
>
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