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YUM Brands Entering a stock split between two companies in Investment (Spin off) - Quicken 2017 for

Unknown
Unknown Member
edited October 2018 in Investing (Windows)
I own 1000 shares of a publicly traded stock in Company X for many years. Last week X split in 1/2 (X + Y) so X now has 500 shares Y, the new company has 500 shares. Both X and Y are now traded at completely different prices. X has the origional price before the split and Y has a much lower price. How do I enter this transactkion in my 2017 Quicken for Windows. This is a tax free transaction.

Comments

  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
    edited May 2018
    Since you have chosen to be vague as to the company, I can only be general.  Likely, I would choose to do a Remove Shares taking out 500 shares of X noting the cost basis and acquisition dates of those shares, followed by an Add Shares (or multiple Add Share transactions) making use of the noted cost basis and acquisition dates.  But it is also possible that even though the share count split 50/50, the cost basis may not split that way.  Why be vague?
  • splasher
    splasher SuperUser ✭✭✭✭
    edited October 2018
    Don't be so cryptic.  Reply with the company involved and someone can probably give you very explicit information rather than generalities.
    -splasher  using Q since 1996 -  Subscription  -  Win10
    -also older versions as needed for testing
    -Questions? Check out the  Quicken Windows FAQ list
  • Unknown
    Unknown Member
    edited March 2017
    Yum Brands, Inc. spinned off half of its shares into a new company Yum China Holdings Inc.
  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
    edited October 2018
    Yum Brands, Inc. spinned off half of its shares into a new company Yum China Holdings Inc.
    That changes the answer.  

    Per the Yum website, Yum distributed 1 share of YUMC (Yum China) for each share of Yum held.  I see no mention of a reverse split reducing the ownership of YUM shares, so from what I have seen, you should still have 1000 shares of YUM and you should now also have 1000 shares of YUMC.  Yesterday, you had 1000 YUM at about $86/share = $86,000.  Today you have 1000 YUM at about $60/share + 1000 YUMC at about $26/share = $86,000 

    My first suggestion is to be patient, since this spinoff just occurred today - 11/1/16.  YUM will be publishing a form 8937 in the coming days to document their opinion on the applicable cost basis transfer, though that determination remains your (the taxpayer's) responsibility.  Your brokerage (as applicable) will also be working the data.  

    The basics usually flow this way:  The fair market values for the two companies are determined as of today. Those values might be similar to the approximations I cited above, about 60 and 26.  If so, the YUM shares represent about 70% of the total value, and the YUMC shares represent about 30% of the total.  You (and your broker) would then want to allocate cost basis to your now two holdings in a like manner.  Your YUM shares continue forward with 70% of their original cost basis; your new YUMC holding gets 30% of the original YUM shares cost basis.  The final percentages depend on the specific fair market values determined.  These values are pure estimates.

    In Quicken, I would be entering a Remove Shares transaction for all YUM shares, noting the acquisition dates and cost basis for each lot.  I would then enter for each lot an Add Shares for the YUM lot with 70% of the original basis and the original acquisition date and an Add Shares for the YUMC shares for that lot with the same acquisition date and 30% of the original YUM cost basis.  

    But again, I would be patient and awaiting the YUM form 8937 said and what my broker finally ended with.  

    Backup first before venturing into uncharted Quicken territory.
  • splasher
    splasher SuperUser ✭✭✭✭
    edited December 2016
    q.lurker said:

    Yum Brands, Inc. spinned off half of its shares into a new company Yum China Holdings Inc.
    That changes the answer.  

    Per the Yum website, Yum distributed 1 share of YUMC (Yum China) for each share of Yum held.  I see no mention of a reverse split reducing the ownership of YUM shares, so from what I have seen, you should still have 1000 shares of YUM and you should now also have 1000 shares of YUMC.  Yesterday, you had 1000 YUM at about $86/share = $86,000.  Today you have 1000 YUM at about $60/share + 1000 YUMC at about $26/share = $86,000 

    My first suggestion is to be patient, since this spinoff just occurred today - 11/1/16.  YUM will be publishing a form 8937 in the coming days to document their opinion on the applicable cost basis transfer, though that determination remains your (the taxpayer's) responsibility.  Your brokerage (as applicable) will also be working the data.  

    The basics usually flow this way:  The fair market values for the two companies are determined as of today. Those values might be similar to the approximations I cited above, about 60 and 26.  If so, the YUM shares represent about 70% of the total value, and the YUMC shares represent about 30% of the total.  You (and your broker) would then want to allocate cost basis to your now two holdings in a like manner.  Your YUM shares continue forward with 70% of their original cost basis; your new YUMC holding gets 30% of the original YUM shares cost basis.  The final percentages depend on the specific fair market values determined.  These values are pure estimates.

    In Quicken, I would be entering a Remove Shares transaction for all YUM shares, noting the acquisition dates and cost basis for each lot.  I would then enter for each lot an Add Shares for the YUM lot with 70% of the original basis and the original acquisition date and an Add Shares for the YUMC shares for that lot with the same acquisition date and 30% of the original YUM cost basis.  

    But again, I would be patient and awaiting the YUM form 8937 said and what my broker finally ended with.  

    Backup first before venturing into uncharted Quicken territory.Great explanation, q.lurker.  Like I told the OP originally, with the right info, a solid answer is possible rather than talking in generalities.
    -splasher  using Q since 1996 -  Subscription  -  Win10
    -also older versions as needed for testing
    -Questions? Check out the  Quicken Windows FAQ list
  • Unknown
    Unknown Member
    edited November 2016
    Thank you, Mr. Lurker. Being a neophyte to this group, I was not aware that I could disclose the name of the company, but upon prodding I am glad that I did. I will follow your advice until I get the transaction properly included in my Quicken Investment program.
  • smfcpacfp
    smfcpacfp Member
    edited May 2018

    There is no such thing as a stock split between two
    companies as far as I know.  There are stock spin offs,
    stock split ups and stock split offs

    In a spin off, one company gives it
    shareholders shares in a company that it owns (created).

    In a split up usually there are two or
    more operating divisions within a corporate entity, and for whatever reason the
    two divisions decide they want to unaffiliate. 
    My experience is with closely held businesses and the managements of the
    two companies don’t get along.  Either a
    new company is formed and the owner/mangers of that company turn in their stock
    in the old company and receive all of the stock of the new company, or two new
    companies are formed and the old company ceases to exist.   

    A stock split off occurs when shareholders
    in a corporation turn in some of their shares for shares in a
    new corporation (to them). 

    Spin
    offs
    are most common and someone mentioned Yum!
    Brands.  Yum! Brands spun off Yum China
    on a 1 for 1 basis today.  For every
    share of Yum! Brands you owned, you got one share of Yum China.  I happen to own shares of Yum! Brands so this
    is pertinent to me.  In a spin off, you
    allocate your cost basis in the old stock to the shares in the two companies
    based upon the relative FMV immediately after the spin off.  Since the spin off occurred before the open
    today we can look at the opening trade. 

    Yum! Brands - $62.21

    Yum China    -
    $24.60

    Yum China’s share of my basis is 24.60/(62.21+24.60) =
    28.34%

    What
    to do in Quicken?

    If you download transactions from your broker, Quicken (2015) will
    ask you if you want to add a transaction for the new shares.  I recommend that you delete the
    transaction.  Instead go to the account
    and click on Enter Transaction

    Choose Corporate Securities Spin-off

    You need to fill in 5 boxes, and the description is a
    bit confusing, in my opinion.  I will
    show you what I did for Yum! Brands

    Security
    Name:
    Yum! Brands (a drop down box)

    New
    Company
    : Yum China Hldg Inc Com

    New
    Shares Issued:
    1 (this is the ratio of new to old
    shares.  In my case 1 new for 1 old.)

    Cost
    per old share:
    $62.21 (FMV used for basis allocation)

    Cost
    per new share:
    $24.60 (FMV used for basis allocation)

    I added a memo stating that 28.34% of the old basis was
    allocated to Yum China and did not check the taxable spinoff.

    In a prior life, I was a tax attorney in NYC who specialized
    in tax free reorganizations, a very narrow specialty, whose job it was to make
    sure that companies like Yum! Brands didn’t screw up and make transactions like
    this - taxable.

  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
    edited December 2016
    smfcpacfp said:

    There is no such thing as a stock split between two
    companies as far as I know.  There are stock spin offs,
    stock split ups and stock split offs

    In a spin off, one company gives it
    shareholders shares in a company that it owns (created).

    In a split up usually there are two or
    more operating divisions within a corporate entity, and for whatever reason the
    two divisions decide they want to unaffiliate. 
    My experience is with closely held businesses and the managements of the
    two companies don’t get along.  Either a
    new company is formed and the owner/mangers of that company turn in their stock
    in the old company and receive all of the stock of the new company, or two new
    companies are formed and the old company ceases to exist.   

    A stock split off occurs when shareholders
    in a corporation turn in some of their shares for shares in a
    new corporation (to them). 

    Spin
    offs
    are most common and someone mentioned Yum!
    Brands.  Yum! Brands spun off Yum China
    on a 1 for 1 basis today.  For every
    share of Yum! Brands you owned, you got one share of Yum China.  I happen to own shares of Yum! Brands so this
    is pertinent to me.  In a spin off, you
    allocate your cost basis in the old stock to the shares in the two companies
    based upon the relative FMV immediately after the spin off.  Since the spin off occurred before the open
    today we can look at the opening trade. 

    Yum! Brands - $62.21

    Yum China    -
    $24.60

    Yum China’s share of my basis is 24.60/(62.21+24.60) =
    28.34%

    What
    to do in Quicken?

    If you download transactions from your broker, Quicken (2015) will
    ask you if you want to add a transaction for the new shares.  I recommend that you delete the
    transaction.  Instead go to the account
    and click on Enter Transaction

    Choose Corporate Securities Spin-off

    You need to fill in 5 boxes, and the description is a
    bit confusing, in my opinion.  I will
    show you what I did for Yum! Brands

    Security
    Name:
    Yum! Brands (a drop down box)

    New
    Company
    : Yum China Hldg Inc Com

    New
    Shares Issued:
    1 (this is the ratio of new to old
    shares.  In my case 1 new for 1 old.)

    Cost
    per old share:
    $62.21 (FMV used for basis allocation)

    Cost
    per new share:
    $24.60 (FMV used for basis allocation)

    I added a memo stating that 28.34% of the old basis was
    allocated to Yum China and did not check the taxable spinoff.

    In a prior life, I was a tax attorney in NYC who specialized
    in tax free reorganizations, a very narrow specialty, whose job it was to make
    sure that companies like Yum! Brands didn’t screw up and make transactions like
    this - taxable.

    @Steve: I appreciate your input on this transaction.  It is good to have a new voice with a given level of expertise as well.  

    I have objections to the Corporate Spinoff action in Quicken which have developed over many years of using this program.  You may have noted when using that action, Quicken has entered backdated transactions in your records showing a Return of Capital and a Buy Shares transactions associated with each lot of the original company you held at the time of purchase of those lots.  That amounts to changing and misrepresenting history.  For that reason, I do not recommend use of that action.  

    In this case, use of the Corporate Spinoff action will result in showing that you owned both YUM and YUMC at a time when YUMC did not exist.  Further, the valuation on YUMC at that time will be the valuation on 11/1/16 overstating your net worth and investment portfolio from then until now.  

    Others may not be so concerned about that historical presentation, but it is off by enough to cause me to instead use the Remove Shares / Add Shares sequence I outlined before, all dated to current times - time of actual spinoff.  Similarly, that backdating approach may have an effect on various return and performance calculations Quicken may perform.  

    I support your calculation presentation, with the caveat that opening prices are only one accepted way of determining FMV immediately following the spinoff.  Other methods I have seen used include hi/lo averages for the day, Open/Close averages for the day, closing prices for the day, and weighted average prices.  Generally, I suggest Quicken users try to follow methodologies for determining FMV consistent with the brokerages, the companies involved, or other tax professionals.  THt becomes my reason to suggest patience on the part of the user when entering this type of event.

    Again, thanks for your input.  
  • smfcpacfp
    smfcpacfp Member
    edited November 2016
    smfcpacfp said:

    There is no such thing as a stock split between two
    companies as far as I know.  There are stock spin offs,
    stock split ups and stock split offs

    In a spin off, one company gives it
    shareholders shares in a company that it owns (created).

    In a split up usually there are two or
    more operating divisions within a corporate entity, and for whatever reason the
    two divisions decide they want to unaffiliate. 
    My experience is with closely held businesses and the managements of the
    two companies don’t get along.  Either a
    new company is formed and the owner/mangers of that company turn in their stock
    in the old company and receive all of the stock of the new company, or two new
    companies are formed and the old company ceases to exist.   

    A stock split off occurs when shareholders
    in a corporation turn in some of their shares for shares in a
    new corporation (to them). 

    Spin
    offs
    are most common and someone mentioned Yum!
    Brands.  Yum! Brands spun off Yum China
    on a 1 for 1 basis today.  For every
    share of Yum! Brands you owned, you got one share of Yum China.  I happen to own shares of Yum! Brands so this
    is pertinent to me.  In a spin off, you
    allocate your cost basis in the old stock to the shares in the two companies
    based upon the relative FMV immediately after the spin off.  Since the spin off occurred before the open
    today we can look at the opening trade. 

    Yum! Brands - $62.21

    Yum China    -
    $24.60

    Yum China’s share of my basis is 24.60/(62.21+24.60) =
    28.34%

    What
    to do in Quicken?

    If you download transactions from your broker, Quicken (2015) will
    ask you if you want to add a transaction for the new shares.  I recommend that you delete the
    transaction.  Instead go to the account
    and click on Enter Transaction

    Choose Corporate Securities Spin-off

    You need to fill in 5 boxes, and the description is a
    bit confusing, in my opinion.  I will
    show you what I did for Yum! Brands

    Security
    Name:
    Yum! Brands (a drop down box)

    New
    Company
    : Yum China Hldg Inc Com

    New
    Shares Issued:
    1 (this is the ratio of new to old
    shares.  In my case 1 new for 1 old.)

    Cost
    per old share:
    $62.21 (FMV used for basis allocation)

    Cost
    per new share:
    $24.60 (FMV used for basis allocation)

    I added a memo stating that 28.34% of the old basis was
    allocated to Yum China and did not check the taxable spinoff.

    In a prior life, I was a tax attorney in NYC who specialized
    in tax free reorganizations, a very narrow specialty, whose job it was to make
    sure that companies like Yum! Brands didn’t screw up and make transactions like
    this - taxable.

    I never really paid attention to how Quicken handled a spinoff, but it does indicate that the return of capital and the simulated buy transactions were based upon a spinoff on 11/1/16.  If you made numerous buy transactions, at various price and use the specific identification method for determining cost for partial sales of your position, it gives you an accurate cost basis without having to do any additional side computations.  

    As to the method of splitting the cost basis between the two (or more resulting corporations), I doubt whether there would be much difference between the methods unless it was a particularly volatile day.  However the company, as you said, will provide advice to its shareholders as to allocate basis. 
  • EdC
    EdC Member ✭✭
    edited May 2018
    Good information here... thank you. I have a question on how historical prices will work in Quicken to show the market value of YUM prior to the spinoff. As I understand tax law, even though YUMC did not exist prior to 10/30/16, for long/short term calculations I should consider YUMC as held since the same data as my YUM purchase (in my case 01/05/16). Since YUM will now have a lower cost basis effective 01/01/16, it will appear as if there were a larger gain than really existed prior to 10/30. Likewise, YUMC will have show a corresponding loss prior to 10/30 (assuming YUMC market prices do not show up until 10/30). It's all just academic, but wondered if one method vs. the other described above will do odd things in Quicken like adjust historical prices by the ratio of the spinoff.
  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
    edited December 2016
    EdC said:

    Good information here... thank you. I have a question on how historical prices will work in Quicken to show the market value of YUM prior to the spinoff. As I understand tax law, even though YUMC did not exist prior to 10/30/16, for long/short term calculations I should consider YUMC as held since the same data as my YUM purchase (in my case 01/05/16). Since YUM will now have a lower cost basis effective 01/01/16, it will appear as if there were a larger gain than really existed prior to 10/30. Likewise, YUMC will have show a corresponding loss prior to 10/30 (assuming YUMC market prices do not show up until 10/30). It's all just academic, but wondered if one method vs. the other described above will do odd things in Quicken like adjust historical prices by the ratio of the spinoff.

    @EdC:  If you choose to use the Corporate Spinoff action built into Quicken, your concern is valid.  Quicken does not alter the historical valutions for the individual strocks as pert of their process.  So taking that course, your data will show that you owned XX shares of YUM at the actual trading values from 1/5/16 through the split.  You data will also show that you owned YUMC from 1/5/16 through the split.  The initial value will be the basis of those shares and that valuation will apply until the date that Quicken does get the true prices (date of spinoff or thereabout).  This second aspect (the YUC data) is incorret from 1/5/16 until the actual spinoff.  This incorrect treatment is why I do not use the Corporate spinoff action.  

    If you follow the methods I outlined above, you will not have any deceptive historical data.  The transactions are all date to the time of the split.  It is only that time, that YUMC enters the picture and the cost basis gets split between the two companies.  

    HTH
  • EdC
    EdC Member ✭✭
    edited November 2016
    Thanks q.lurker. Will use your remove/add approach. Seems much cleaner and more understandable.
  • Malcolm McCorquodale
    Malcolm McCorquodale Member ✭✭
    edited May 2018
    Thanks.  Here is what I did earlier this month.  

    I purchased 500 shares of YUM on 10/8/2012 in a rollover IRA
    account.

    In order to handle the spin-off, I did the following:

    1.     
    An Add
    transaction of 500 shares YUMC on 11/1/2016 with approximately a cost basis of 28%
    of YUM’s cost basis or $9,351.  Date of
    Acquisition (for tax purposes): 10/8/2012.

    2.     
    A RtrnCap
    transaction on 11/2/2016 for YUM to reduce my cost basis in YUM by 28%

    3.     
    A WithdrwX
    transaction on 11/2/2016 to remove the “cash amount” that was added by the Add
    transaction in step 1.

    Now, YUM is correct before 11/1 and both show up after 10/31 in Account Overview “Holdings”
    window.  

    I am thinking that q.lurker's method may be better as a YTD Investment Income report shows the ROC transaction as income.   Any comments? 
  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
    edited December 2016

    Thanks.  Here is what I did earlier this month.  

    I purchased 500 shares of YUM on 10/8/2012 in a rollover IRA
    account.

    In order to handle the spin-off, I did the following:

    1.     
    An Add
    transaction of 500 shares YUMC on 11/1/2016 with approximately a cost basis of 28%
    of YUM’s cost basis or $9,351.  Date of
    Acquisition (for tax purposes): 10/8/2012.

    2.     
    A RtrnCap
    transaction on 11/2/2016 for YUM to reduce my cost basis in YUM by 28%

    3.     
    A WithdrwX
    transaction on 11/2/2016 to remove the “cash amount” that was added by the Add
    transaction in step 1.

    Now, YUM is correct before 11/1 and both show up after 10/31 in Account Overview “Holdings”
    window.  

    I am thinking that q.lurker's method may be better as a YTD Investment Income report shows the ROC transaction as income.   Any comments? 
    With one lot of YUM, the RtrnCap might be OK.  With more than one lot, the RtrnCap may not allocate to the lots as the user would like and anticipate.  That is why I shy aware from that approach.  The Remove Shares / Add Shares for YUM accomplish the same effect with more reliable results (IMO).

    The RtrnCap for an investment income report does show as income, but it should not show on taxable income reports or may need to be excluded by customizing reports to exclude Categories "Not Categorized".
  • Ringo22
    Ringo22 Member ✭✭
    edited December 2016

    Thanks.  Here is what I did earlier this month.  

    I purchased 500 shares of YUM on 10/8/2012 in a rollover IRA
    account.

    In order to handle the spin-off, I did the following:

    1.     
    An Add
    transaction of 500 shares YUMC on 11/1/2016 with approximately a cost basis of 28%
    of YUM’s cost basis or $9,351.  Date of
    Acquisition (for tax purposes): 10/8/2012.

    2.     
    A RtrnCap
    transaction on 11/2/2016 for YUM to reduce my cost basis in YUM by 28%

    3.     
    A WithdrwX
    transaction on 11/2/2016 to remove the “cash amount” that was added by the Add
    transaction in step 1.

    Now, YUM is correct before 11/1 and both show up after 10/31 in Account Overview “Holdings”
    window.  

    I am thinking that q.lurker's method may be better as a YTD Investment Income report shows the ROC transaction as income.   Any comments? 
    What is the tax need to record keep gains and losses of investments in an IRA account?  I have owned YUM since 2001 in a brokerage account and have over 50 buys (DRIP).  If I don't use Corp. Spin Off I will never be able to manually use the remove and add for both the YUM & YUMC lots. I could sell all, but the last 3 lots, of my YUMC shares today as Long Term holdings with an accurate gain or loss shown within Quicken. I have enjoyed reading all of the above comments.
  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
    edited December 2016

    Thanks.  Here is what I did earlier this month.  

    I purchased 500 shares of YUM on 10/8/2012 in a rollover IRA
    account.

    In order to handle the spin-off, I did the following:

    1.     
    An Add
    transaction of 500 shares YUMC on 11/1/2016 with approximately a cost basis of 28%
    of YUM’s cost basis or $9,351.  Date of
    Acquisition (for tax purposes): 10/8/2012.

    2.     
    A RtrnCap
    transaction on 11/2/2016 for YUM to reduce my cost basis in YUM by 28%

    3.     
    A WithdrwX
    transaction on 11/2/2016 to remove the “cash amount” that was added by the Add
    transaction in step 1.

    Now, YUM is correct before 11/1 and both show up after 10/31 in Account Overview “Holdings”
    window.  

    I am thinking that q.lurker's method may be better as a YTD Investment Income report shows the ROC transaction as income.   Any comments? 
    To all:  The Form 8937 document for this transaction is posted here at this time.  In that document, YUM chooses to use fair market values of 60.69 and 26.19.  These values lead to a determination that 69.85% of the basis stays with YUM and 30.15% transfers to the new YUMC shares.

    @Ringo:  I am working off the top here so bear with me and proceed cautiously (i. e., make sure you have good backups!).  I believe what I am offering is a viable path for DRP investors in a case like this,
    1. Create a new brokerage account of like kind to the original account holding the shares.  This will be a temporary account.  Use the Advanced setup to create it as a manual, unaffiliated account.
    2. From the original account, enter (Enter Transactions button) a Shares Transferred between Accounts transactions moving all YUM shares to the temporary account.  I would date the transfer 10/30/16.  
    3. In the temporary account, you can try the Corporate Spinoff action dated 10/31/16 using the values (60.69 and 26.19) cited above or other defensible values consistent with your brokers and DRP account information.  
    4. Now that you have the correct share quantities and lot acquisitions shown for both the TUM and YUMC holdings, enter another Shares Transferred action dated 10/31/16 moving both YUM and YUMC holding from the temporary account back to the original account.  In that original account, you will now have the original Remove Shares entry for the YUM holdings (redate to 10/31/16) and all the applicable Add Share entries for both the reduced basis YUM lots and the newly held YUMC lots.   
    5. After that entry, carefully check the cost basis Quicken has determined and is showing for ALL lots of both YUM and YUMC in that original account.  If there are any discrepancies, edit the cost basis information accordingly.  (For some similar events, it is applicable to also check and edit the share quantities, but since this is a 1:1 distribution ratio, that data should be 'clean'.)
    6. Once you are sure about the final data in the original account, you can delete the temporary account.
    That should represent the desired final result,

    But you also started with a question about the applicability in an IRA (tax deferred) account.  For myself, I am anal enough about such detail that I would go through as I have outlined, but from a tax perspective, especially in a tax-deferred account, such detail is not really required.  You could equally get by with one Remove Shares (YUM), one Add Shares (YUM with reduced basis) and one Add Shares (YUMC) in a tax deferred account - three transactions total.  For a taxable account a pattern of one Remove Shares, one Add Shares for all LT YUM holdings (with reduced basis), one Add Shares for LT YUMC holdings, then the applicable series of Add Shares for the YUM and YUMC holdings more recently acquired (less than a year ago) could be used.  A path similar to what I outlined above could be helpful for those ST acquisitions.   

    HTH
  • Malcolm McCorquodale
    Malcolm McCorquodale Member ✭✭
    edited December 2016

    Thanks.  Here is what I did earlier this month.  

    I purchased 500 shares of YUM on 10/8/2012 in a rollover IRA
    account.

    In order to handle the spin-off, I did the following:

    1.     
    An Add
    transaction of 500 shares YUMC on 11/1/2016 with approximately a cost basis of 28%
    of YUM’s cost basis or $9,351.  Date of
    Acquisition (for tax purposes): 10/8/2012.

    2.     
    A RtrnCap
    transaction on 11/2/2016 for YUM to reduce my cost basis in YUM by 28%

    3.     
    A WithdrwX
    transaction on 11/2/2016 to remove the “cash amount” that was added by the Add
    transaction in step 1.

    Now, YUM is correct before 11/1 and both show up after 10/31 in Account Overview “Holdings”
    window.  

    I am thinking that q.lurker's method may be better as a YTD Investment Income report shows the ROC transaction as income.   Any comments? 
    Here is a link to the 8937 for YUM / YUMC
    http://www.yum.com/app/uploads/Yum_China_Spin_Cost_Basis_Information.pdf
  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
    edited December 2016

    Thanks.  Here is what I did earlier this month.  

    I purchased 500 shares of YUM on 10/8/2012 in a rollover IRA
    account.

    In order to handle the spin-off, I did the following:

    1.     
    An Add
    transaction of 500 shares YUMC on 11/1/2016 with approximately a cost basis of 28%
    of YUM’s cost basis or $9,351.  Date of
    Acquisition (for tax purposes): 10/8/2012.

    2.     
    A RtrnCap
    transaction on 11/2/2016 for YUM to reduce my cost basis in YUM by 28%

    3.     
    A WithdrwX
    transaction on 11/2/2016 to remove the “cash amount” that was added by the Add
    transaction in step 1.

    Now, YUM is correct before 11/1 and both show up after 10/31 in Account Overview “Holdings”
    window.  

    I am thinking that q.lurker's method may be better as a YTD Investment Income report shows the ROC transaction as income.   Any comments? 
    Thanks. I seem to have forgotten the link part.
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