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How To Enter BKS Spinoff of BNED?

mshiggins
mshiggins SuperUser ✭✭✭✭✭
edited January 2019 in Investing (Windows)

Barnes & Noble (BKS) spun off their educational book company, Barnes & Noble Education (BNED)  at 0.632 shares of Barnes & Noble Education to 1 share of Barnes & Noble.

How do I enter this in Quicken?

The Form 8937 is not yet available, but Gainskeeper calculated the cost basis allocation at 67% BKS/33% BNED.

Here is the announcement on the spinoff:

http://www.barnesandnobleinc.com/press_releases/7_14_15_bn_board_approves_spin-off_of_bn_education.h...

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Comments

  • Unknown
    Unknown Member
    edited July 2016

    First, there's no hard and fast prescribed "cookbook" method for allocating the initial basis between the "old" and "new" stock.  The generalization is that you allocate the basis based on the relative value of the holdings after the deal is done but there's wide latitude there.  The Form 8937 certainly is not the Word of God in these matters and the 67%/33% allocation is consistent with the allocation others, (e.g., costbasis.com), have come up with.  Use whatever allocation you feel you could justify to the IRS, if they'd ever ask.


    Second, Quicken does have a "Corporate Securities Spin-off" wizard you can use, but most experienced users advise against it for a variety of reasons.


    The generally recommended process is to do your calculations of allocation outside of Quicken on a lot by lot basis.  Then, having backed up your data file, do a "Removed" transaction zeroing out your BKS stock and then a series of "Add", "Add" transactions, by lot, for the new cost basis of BKS and shares and cost basis of BNED.  With each Add transaction you make sure that the "Date acquired" for each lot of BKS and BNED is correct.  (The holding period for each lot of BNED is the same as the holding period for each lot of BKS from whence it came).  You then check that your total basis, by lot, is the same as it was before the spin off.


    Tom Young
  • mshiggins
    mshiggins SuperUser ✭✭✭✭✭
    edited May 2018

    The Form 8937 has been posted for the spinoff.


    http://www.barnesandnobleinc.com/for_investors/bned/bned_form_8937_rev.pdf 


    Per the 8937, the cost basis allocations were BKS 67.762% and BNED 32.328%, calculated from the value-weighted average price (VWAP) of BKS and BNED ($17.1578 and $12.9160, respectively) on August 4, 2015. 


    I had 16 lots of BKS from the initial purchase and subsequent dividend reinvestments. To enter the spinoff transactions, I did the following (after creating a back up):
    1. Used Shares Transferred Between Accounts from the actual brokerage account to an unused brokerage account to generate Remove Shares for the BKS and Add Shares for each lot of BKS.
    2. In the unused brokerage account, used a Shares Transferred Between Accounts to "transfer" the BKS lots back to the original account.
    3. In the actual brokerage account, edited the resulting Add Shares to update the cost basis to the new BKS cost basis.
    4. In the unused brokerage account, deleted the Remove Shares transaction, then re-entered the Shares Transferred Between Accounts transaction. This was to generate Add Shares for each lot of BKS that could then be edited to the corresponding BNED transactions.
    5. In the actual brokerage account, edited the resulting Add Shares to update the security from BKS to BNED and the cost and number of shares for the BNED figures.
    6. In the unused brokerage account, deleted the unneeded Add Shares and Remove Shares transactions.
    Prior to step 2, I tried using the Return of Capital transaction to reduce the BKS cost by the amount of the BNED cost, but due to the bug that applies all of the ROC to the initial lot, opted to just enter the cost basis values for each lot manually.
    Quicken user since Q1999. Currently using QW2017.
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  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
    edited December 2016
    mshiggins said:


    The Form 8937 has been posted for the spinoff.


    http://www.barnesandnobleinc.com/for_investors/bned/bned_form_8937_rev.pdf 


    Per the 8937, the cost basis allocations were BKS 67.762% and BNED 32.328%, calculated from the value-weighted average price (VWAP) of BKS and BNED ($17.1578 and $12.9160, respectively) on August 4, 2015. 


    I had 16 lots of BKS from the initial purchase and subsequent dividend reinvestments. To enter the spinoff transactions, I did the following (after creating a back up):


    1. Used Shares Transferred Between Accounts from the actual brokerage account to an unused brokerage account to generate Remove Shares for the BKS and Add Shares for each lot of BKS.
    2. In the unused brokerage account, used a Shares Transferred Between Accounts to "transfer" the BKS lots back to the original account.
    3. In the actual brokerage account, edited the resulting Add Shares to update the cost basis to the new BKS cost basis.
    4. In the unused brokerage account, deleted the Remove Shares transaction, then re-entered the Shares Transferred Between Accounts transaction. This was to generate Add Shares for each lot of BKS that could then be edited to the corresponding BNED transactions.
    5. In the actual brokerage account, edited the resulting Add Shares to update the security from BKS to BNED and the cost and number of shares for the BNED figures.
    6. In the unused brokerage account, deleted the unneeded Add Shares and Remove Shares transactions.
    Prior to step 2, I tried using the Return of Capital transaction to reduce the BKS cost by the amount of the BNED cost, but due to the bug that applies all of the ROC to the initial lot, opted to just enter the cost basis values for each lot manually.
    Well done.  Although you are editing 32 transactions and that sounds cumbersome, when you got into it and with a spreadsheet otherwise handy with the desired values, I suspect it really went pretty fast.
  • Rtang
    Rtang Member ✭✭✭
    edited December 2016
    mshiggins said:


    The Form 8937 has been posted for the spinoff.


    http://www.barnesandnobleinc.com/for_investors/bned/bned_form_8937_rev.pdf 


    Per the 8937, the cost basis allocations were BKS 67.762% and BNED 32.328%, calculated from the value-weighted average price (VWAP) of BKS and BNED ($17.1578 and $12.9160, respectively) on August 4, 2015. 


    I had 16 lots of BKS from the initial purchase and subsequent dividend reinvestments. To enter the spinoff transactions, I did the following (after creating a back up):


    1. Used Shares Transferred Between Accounts from the actual brokerage account to an unused brokerage account to generate Remove Shares for the BKS and Add Shares for each lot of BKS.
    2. In the unused brokerage account, used a Shares Transferred Between Accounts to "transfer" the BKS lots back to the original account.
    3. In the actual brokerage account, edited the resulting Add Shares to update the cost basis to the new BKS cost basis.
    4. In the unused brokerage account, deleted the Remove Shares transaction, then re-entered the Shares Transferred Between Accounts transaction. This was to generate Add Shares for each lot of BKS that could then be edited to the corresponding BNED transactions.
    5. In the actual brokerage account, edited the resulting Add Shares to update the security from BKS to BNED and the cost and number of shares for the BNED figures.
    6. In the unused brokerage account, deleted the unneeded Add Shares and Remove Shares transactions.
    Prior to step 2, I tried using the Return of Capital transaction to reduce the BKS cost by the amount of the BNED cost, but due to the bug that applies all of the ROC to the initial lot, opted to just enter the cost basis values for each lot manually.
    [mention://67891 @mshiggins] : Just curious, what version of Q are you doing that in?
  • mshiggins
    mshiggins SuperUser ✭✭✭✭✭
    edited December 2016
    mshiggins said:


    The Form 8937 has been posted for the spinoff.


    http://www.barnesandnobleinc.com/for_investors/bned/bned_form_8937_rev.pdf 


    Per the 8937, the cost basis allocations were BKS 67.762% and BNED 32.328%, calculated from the value-weighted average price (VWAP) of BKS and BNED ($17.1578 and $12.9160, respectively) on August 4, 2015. 


    I had 16 lots of BKS from the initial purchase and subsequent dividend reinvestments. To enter the spinoff transactions, I did the following (after creating a back up):


    1. Used Shares Transferred Between Accounts from the actual brokerage account to an unused brokerage account to generate Remove Shares for the BKS and Add Shares for each lot of BKS.
    2. In the unused brokerage account, used a Shares Transferred Between Accounts to "transfer" the BKS lots back to the original account.
    3. In the actual brokerage account, edited the resulting Add Shares to update the cost basis to the new BKS cost basis.
    4. In the unused brokerage account, deleted the Remove Shares transaction, then re-entered the Shares Transferred Between Accounts transaction. This was to generate Add Shares for each lot of BKS that could then be edited to the corresponding BNED transactions.
    5. In the actual brokerage account, edited the resulting Add Shares to update the security from BKS to BNED and the cost and number of shares for the BNED figures.
    6. In the unused brokerage account, deleted the unneeded Add Shares and Remove Shares transactions.
    Prior to step 2, I tried using the Return of Capital transaction to reduce the BKS cost by the amount of the BNED cost, but due to the bug that applies all of the ROC to the initial lot, opted to just enter the cost basis values for each lot manually.
    Q2013.
    Quicken user since Q1999. Currently using QW2017.
    Questions? Check out the  Quicken Windows FAQ list
  • Rtang
    Rtang Member ✭✭✭
    edited December 2016
    mshiggins said:


    The Form 8937 has been posted for the spinoff.


    http://www.barnesandnobleinc.com/for_investors/bned/bned_form_8937_rev.pdf 


    Per the 8937, the cost basis allocations were BKS 67.762% and BNED 32.328%, calculated from the value-weighted average price (VWAP) of BKS and BNED ($17.1578 and $12.9160, respectively) on August 4, 2015. 


    I had 16 lots of BKS from the initial purchase and subsequent dividend reinvestments. To enter the spinoff transactions, I did the following (after creating a back up):


    1. Used Shares Transferred Between Accounts from the actual brokerage account to an unused brokerage account to generate Remove Shares for the BKS and Add Shares for each lot of BKS.
    2. In the unused brokerage account, used a Shares Transferred Between Accounts to "transfer" the BKS lots back to the original account.
    3. In the actual brokerage account, edited the resulting Add Shares to update the cost basis to the new BKS cost basis.
    4. In the unused brokerage account, deleted the Remove Shares transaction, then re-entered the Shares Transferred Between Accounts transaction. This was to generate Add Shares for each lot of BKS that could then be edited to the corresponding BNED transactions.
    5. In the actual brokerage account, edited the resulting Add Shares to update the security from BKS to BNED and the cost and number of shares for the BNED figures.
    6. In the unused brokerage account, deleted the unneeded Add Shares and Remove Shares transactions.
    Prior to step 2, I tried using the Return of Capital transaction to reduce the BKS cost by the amount of the BNED cost, but due to the bug that applies all of the ROC to the initial lot, opted to just enter the cost basis values for each lot manually.
    Ok, thanks.  I was hoping it was Q2007 Mac.  I have always used Tom Young's method, but in QM2007 you cannot enter an acquisition date with an Add Shares transaction, so I always end up with wrong acquisition dates.  Your method seems to only edit the Add Share transactions smoothie probably retain the correct dates.  I will test that in QM2007.  Neat method, thanks.
  • mshiggins
    mshiggins SuperUser ✭✭✭✭✭
    edited December 2016
    mshiggins said:


    The Form 8937 has been posted for the spinoff.


    http://www.barnesandnobleinc.com/for_investors/bned/bned_form_8937_rev.pdf 


    Per the 8937, the cost basis allocations were BKS 67.762% and BNED 32.328%, calculated from the value-weighted average price (VWAP) of BKS and BNED ($17.1578 and $12.9160, respectively) on August 4, 2015. 


    I had 16 lots of BKS from the initial purchase and subsequent dividend reinvestments. To enter the spinoff transactions, I did the following (after creating a back up):


    1. Used Shares Transferred Between Accounts from the actual brokerage account to an unused brokerage account to generate Remove Shares for the BKS and Add Shares for each lot of BKS.
    2. In the unused brokerage account, used a Shares Transferred Between Accounts to "transfer" the BKS lots back to the original account.
    3. In the actual brokerage account, edited the resulting Add Shares to update the cost basis to the new BKS cost basis.
    4. In the unused brokerage account, deleted the Remove Shares transaction, then re-entered the Shares Transferred Between Accounts transaction. This was to generate Add Shares for each lot of BKS that could then be edited to the corresponding BNED transactions.
    5. In the actual brokerage account, edited the resulting Add Shares to update the security from BKS to BNED and the cost and number of shares for the BNED figures.
    6. In the unused brokerage account, deleted the unneeded Add Shares and Remove Shares transactions.
    Prior to step 2, I tried using the Return of Capital transaction to reduce the BKS cost by the amount of the BNED cost, but due to the bug that applies all of the ROC to the initial lot, opted to just enter the cost basis values for each lot manually.
    In the interest of full disclosure, I'm not the originator of the method. But I did pick it up here on the QLC.

    The best method for handling acquisition dates is debatable. I'm assuming you've read some of the previous merger/spinoff postings?
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