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