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How to record the Dell-VMware Spin Off in Quicken register?

Jason R. Battles

I own some Dell stock. How would I record the stock transaction to spin off the new, additional VMware shares.

Here are the details from https://www.crn.com/news/data-center/dell-vmware-spin-off-set-for-nov-1-stock-dividend-approved

"Share distribution will be made to all Dell shareholders of record as of 5 p.m. EST on Oct. 29, 2021. Dell shareholders will receive approximately 0.44 shares of VMware for each share of Dell that they hold, based on shares outstanding Tuesday. No vote or action is required by Dell shareholders to receive the special stock dividend of shares of VMware common stock. "

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Comments

q_lurker

It appears to be a straightforward Corporate Spinoff action (Enter Transactions button).

Do not rely on your brokerage download to get it right. Their download will not typically include the basis for the new holding or adjust down your basis in Dell.

For the spinoff action, you will need a fair market value of Dell and VMWare as of immediately after the spinoff. This is to allocate the basis in your Dell holding to Dell and to the new VMWare holding. Dell is required to publish a Form 8937 presenting their opinion of the fair market values or allocation percentages, but you and your broker are not required to use their numbers. That form could be days or weeks away.

Essentially, patience is a virtue at this point.

Jason R. Battles

Thank you for the reply q_lurker. I initially thought Corporate Spinoff action as well, but that action type seems to create a NEW security whereas VMW already exists in the market and elsewhere in my portfolio. How should I record a disbursement of new shares from an existing compay to another existing company.

q_lurker

You can spin-off something like VMW2 which will create one or more Add Shares for that security. Then manually edit each Add Shares to reflect the proper VMWare security. Finally, delete the VMW2 fake security.