Best Practice for Recording Corporate Spin-offs (AT&T's spin-off today)

Najmi

Since Quicken Mac does not yet have a spin-off function/wizard/transaction type (like its Windows equivalent) is there a recommended best practice for recording this that maintains the account cash balances, cost basis, etc.? Today, AT&T completed its spin-off of its WarnerMedia assets to Discovery, delivering a new share (~0.24 of WBD) for each stock of T. Thank you.

Mike Molloy

I have the same question.

This Barron's article discusses how to calculate the cost basis, but I would like to hear how to account for this in Quicken.

=== quote ===
The cost basis for tax purposes should be based on the value of AT&T and Discovery stock on Friday. AT&T finished at $24.14 and Discovery at $24.43. The initial value of the Warner Bros. Discovery stock received for each AT&T share was roughly $5.90 (0.242 times $24.43), or 25% of the value of AT&T stock on Friday. That means an investor would allocate roughly 75% of his or her cost to AT&T and 25% to Warner Bros. Discovery.

An investor who paid $32 for AT&T stock a year ago would have a cost basis of about $24 a share in AT&T (75% of $32) and about $8 for Warner Bros. Discovery (25% of $32). The effective cost basis in Warner Bros. Discovery stock would be $32 a share—or $8 divided by 0.25.

It gets complicated if an investor has purchased AT&T in multiple transactions.
=== unquote ===

https://www.barrons.com/articles/how-to-handle-the-taxes-on-the-at-t-spinoff-of-warner-bros-51649692976

Mike Molloy

I found other discussions about how to do this, but haven't tried them yet. Search for spin-offs in the Community and you'll find several threads.

See:
https://community.quicken.com/discussion/7897576/spin-offs-problem-with-mac

Also, register your vote for this feature here:
https://community.quicken.com/discussion/7855454/support-corporate-acquisitions-mergers-and-divestitures-spin-offs-in-quicken-mac-4-merged-votes

Najmi

Thanks. What I was hoping to find is the Quicken recommended sequence of manual entries which would represent the process that has been automated in Quicken Windows (and will hopefully make its way to Quicken Mac).

jacobs

Quicken is unfortunately silent on this missing feature. Until they deliver such a feature, it's up to users to figure out for themselves how to record such transactions. It's unfortunate that the developers have been prioritizing adding features to the investing Dashboard and ignoring adding a feature for spin-offs/acquisitions.