Using QM2017 4.5.8 - download added a stock spinoff with price of $0.00

Ken W.
Ken W. Member ✭✭
edited June 2018 in Investing (Mac)
QM2017 automatically downloaded a stock spinoff into my Register. Type is listed as "Add Shares", which is fine, the number of shares is correct, BUT the price is shown as $0.00. This doesn't make sense to me since the stock is publicly traded and does have a price. Doesn't this mean when the stock is sold the cost basis will be $0.00? Should I be concerned?

Comments

  • Alan3
    Alan3 Member ✭✭
    edited September 2017
    Your basis in the original company will be allocated between the original company and the spinoff. Suppose you bought 100 shares of Company X at $50/share or a total of $5,000. Company X has ownership in Company Y, which it spins off. That is, it gives its shareholders (which includes you) shares in Company Y. Suppose you get 25 shares of Y. You now have 100 shares of X and 25 shares of Y. The company will tell you how to allocate the $5,000.
    Your broker showed a $0.00 price probably because at the time the Y shares were distributed, they did not know how to allocate the $5,000 cost.  Your next monthly statement should show the new cost of X and Y shares. You will have to manually adjust the Quicken registers.

    Hope this helps.
  • Unknown
    Unknown Member
    edited December 2019

    Your basis in the original company will be allocated between the original company and the spinoff. Suppose you bought 100 shares of Company X at $50/share or a total of $5,000. Company X has ownership in Company Y, which it spins off. That is, it gives its shareholders (which includes you) shares in Company Y. Suppose you get 25 shares of Y. You now have 100 shares of X and 25 shares of Y. The company will tell you how to allocate the $5,000.
    Your broker showed a $0.00 price probably because at the time the Y shares were distributed, they did not know how to allocate the $5,000 cost.  Your next monthly statement should show the new cost of X and Y shares. You will have to manually adjust the Quicken registers.

    Hope this helps.

    Note: Make sure the stock spinoff has the same purchase date as the original stock (Company X in the example given above). When you find the Cost Basis, don't forget to update the Cost of your original stock. I would change the "Add Shares" to "Buy" using the date of the original stock with the Cost as indicated by your broker and adjust the original stock "Buy" as appropriate. If you bought the original stock on several different dates, you will have to update (correct) each separately.
  • jz
    jz Member ✭✭
    So what do you do if you have been investing regularly (e.g. dividend reinvestment)? It sound like you have to do the same trick for every single purchase?
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