How do I record a corporate spin-off of new securities?

A corporate spin-off can require shares of the new company to be issued to those who own shares of the original company. Use the Corporate Securities Spin-off dialog to record these changes in Quicken when spin-off is determined as nontaxable by the parent company.

1. Open the account you want to use.

2. Click Enter Transactions.

3. In the Enter Transaction list, select Corporate Securities Spin-off.

4. Use this dialog to change the security name and price information when a corporation spins off another corporation or entity and when spin-off is determined as nontaxable by the parent company. Click a link below for more information.Security NameEnter the name of the security as it is currently identified in your Quicken transaction list.New CompanyEnter the name of the new corporation or entity that will receive the spin-off shares.New shares issuedEnter the ratio, not a number of shares. For example, if you own 150 shares of the original company and the spin-off ratio is .65 new shares for each old share, you would enter .65 (the ratio), rather than 97.5 (the total number of shares you received).Cost per old shareEnter the fair market value (sometimes called tax basis allocation) per share of your original security, on the date of the spin-off. If you do not have the information, it should be available from the parent company or from news articles on the day of the spin-off.Cost per new shareEnter the fair market value (sometimes called tax basis allocation) per share of the new security (the one that was spun off), on the date of the spin-off. If you do not have the information, it should be available from the parent company or from news articles on the day of the spin-off.MemoFor example, "Nontaxable spin-off on (date)".

5. Click Enter/New to enter another transaction, or Enter/Done to finish.

Notes

1. To record taxable corporate spin-off of new securities, enter the following transactions:MiscInc "security name" "Amount"=Taxable distribution Amt, usually the value of shares spun offAdded "new security name" "number of shares" Basis=same amount as in previous transaction

2. Quicken enters a Remove Shares transaction for all shares of the parent company and a pair of transactions for each open lot of the parent company— an Add Shares transaction for the parent company and an Add Shares transaction for the spin-off company, recorded with the same date as the spin-off date.

Watch for these related changes:

• A corporate name change can cause the name of the security to change.

• A corporate acquisition can involve stock swaps.