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How To Record DuPont SpinOff of Chemours RRS feed

  • Question

  • Need help on how to properly record DuPont's SpinOff of Chemours.  I had 240 shares of DuPont at the time of the spin off. DuPont common stock holders received 1 share of Chemours(CC) for every 5 shares of DuPont common stock held.

    Is this as simple as just adding 48 share of CC at $0.00 per share ? This is a non-taxable spinoff.

    Saturday, January 2, 2016 9:24 PM

All replies

  • If you use Money Plus, you do a spinoff. For each share of DD you received  0.2 CC 2015 july 1.
    5.085%  of the basis basis passes  to CC in website example:

     http://s2.q4cdn.com/752917794/files/doc_downloads/2015/December/Tax-Cost-Basis-Allocation.pdf

    One way is, from an account register, MoreInvestingTasks->RecordASpecialActivity->RecordASpin-off

    You can also do it from the Details of DD, click Record A Spin-Off in the left column.

     
    Sunday, January 3, 2016 5:48 AM
    Moderator
  • Assuming you are in the US and need to follow the IRS guidelines, I use the following for Money 99.  (I don't know if the newer version have a special process for stock distributions.)

    You have your original basis in DuPont.  Call this B_0

    Get the closing prices of both DuPont and Chemours on the day of the spinoff.  Call these P_d and P_c.

    Compute the value or each holding (on that date) by multiplying the number of shares in each by the corresponding closing price:
        V_d = S_d * P_d, V_c = S_c * P_c, and the total value V_t = V_d + V_c

    The original basis is apportioned to the new holdings in the same ratio as their values.
        Your basis in DuPont is computed as B_d = B_0 * V_d / V_t
        Your basis in Chemours is computed as B_c = B_0 * V_c / V_t
        It should be obvious that B_d + B_c = B_0 (That is one reason the event is non-taxable)

    To enter it into Money
         For DuPont, create a transaction for B_c dollars of type Return of Capital.  This will not affect the number of shares but will reduce your basis in Dupont.
         For Chemours, create a transaction to buy the shares (you said 48) for B_c dollars.  This will create a basis for Chemours.

    The details are in IRS Publication 550, Investment Income and Expenses, Chapter 4, Sales and Trades of Investment Property, the section titled Basis of Investment Property, the sub-section titled Stock dividends, under the topic titled New and old stock not identical.  In the 2014 version, it is on page 44.

    One of the quirks of the tax law, which I don't know if Money handles properly, is if/when you sell Chemours, the determining factor between long and sort term is the original purchase date(s) of DuPont, not the date of the spinoff.

    Sunday, January 3, 2016 5:54 AM