Brookfield stock split

funkws

Is there a good way to record the recent Brookfield (BAM) split and return of capital? It looks like the old BAM is now BN.

q_lurker

The relevant US IRS Form 8937 is (currently) here.
https://bn.brookfield.com/sites/brookfield-bn/files/brookfield/stock-distribution/text-information/distribution-of-asset-manager-us-form-8937.pdf

I am a touch confused about security names so I am using the following nomenclature
Original company (pre 12/09/22) = Brookfield; ticker BAM
Post spinoff Company = Brookfield Corporation; ticker BN
Spun off Company = Brookfield Asset Management, ticker BAM

In my test file, I emulated the example from the 8937 form for the Class A shares.  That is, 100 shares of Brookfield with a basis of $3,000 became 100 shares of Brookfield Corporation (basis 2424.41) and 25 shares Brookfield Asset Management (basis $575.59)

In Quicken,

• I created Brookfield (ticker BAM) and bought 100 shares for $3,000
• 12/8/22, Enter Transactions - Corporate Name Change Brookfield to Brookfield Corporation
• Edit Security Details to change ticker to BN, merge old prices to new ticker, delete old prices
• 12/9/22, Enter Transactions - Corporate Spinoff Brookfield Corporation spins off Brookfield Asset Management
• Used the share ratio of 0.25 and the two prices from the 8937 = 33.77 and 32.07
• That generated three transactions (since I only owned one lot): RtrnCapX, MiscIncX, and Added Shares.
• Edit Security Details for Brookfield Asset Management to add the ticker (BAM)
• Update quotes (to get accurate closings for 12/9/22 since the Form 8937 prices were weighted averages.  BN went to 35.15; BAM went to 32.00.
• Generated Investment Performance Report.  Noted that valuation of the added shares of BAM was $800 ($32 x 25 shares)
• Deleted the MiscIncX transaction (It just confuses things and is not necessary)
• Edited the RtrnCapX to make the Market Value associated with the RtrnCap to be $800 (matching that value from the Inv Performance Rpt. 
• Cross check that cost basis match expected values and that on the Investment Performance Report the Investment and Return column entries for the two securities on 12/9/22 are the same totals ($800 each).  That means that a) cost basis for future sales will be accurate and b) the Average Annual Return figures in total for these two securities in this transaction will be accurate.  

  Hope this helps
  

jr7107

I did a quick search for the return of capital allocation/cost basis breakdown but I'm not sure it is out yet. There is a detailed prospectus issued on SEDAR it might be in there. I didn't dig into it deeply but it outlines some tax scenarios.

The Corporate Spinoff transaction should be okay, but the broker will have the correct calculation once it hits the account and you might want to manually transact it. If there are a lot of lots, it could be cumbersome.

I will keep an eye out for the allocation, it should be available soon.

q_lurker

The relevant US IRS Form 8937 is (currently) here.
https://bn.brookfield.com/sites/brookfield-bn/files/brookfield/stock-distribution/text-information/distribution-of-asset-manager-us-form-8937.pdf

I am a touch confused about security names so I am using the following nomenclature
Original company (pre 12/09/22) = Brookfield; ticker BAM
Post spinoff Company = Brookfield Corporation; ticker BN
Spun off Company = Brookfield Asset Management, ticker BAM

In my test file, I emulated the example from the 8937 form for the Class A shares.  That is, 100 shares of Brookfield with a basis of $3,000 became 100 shares of Brookfield Corporation (basis 2424.41) and 25 shares Brookfield Asset Management (basis $575.59)

In Quicken,

• I created Brookfield (ticker BAM) and bought 100 shares for $3,000
• 12/8/22, Enter Transactions - Corporate Name Change Brookfield to Brookfield Corporation
• Edit Security Details to change ticker to BN, merge old prices to new ticker, delete old prices
• 12/9/22, Enter Transactions - Corporate Spinoff Brookfield Corporation spins off Brookfield Asset Management
• Used the share ratio of 0.25 and the two prices from the 8937 = 33.77 and 32.07
• That generated three transactions (since I only owned one lot): RtrnCapX, MiscIncX, and Added Shares.
• Edit Security Details for Brookfield Asset Management to add the ticker (BAM)
• Update quotes (to get accurate closings for 12/9/22 since the Form 8937 prices were weighted averages.  BN went to 35.15; BAM went to 32.00.
• Generated Investment Performance Report.  Noted that valuation of the added shares of BAM was $800 ($32 x 25 shares)
• Deleted the MiscIncX transaction (It just confuses things and is not necessary)
• Edited the RtrnCapX to make the Market Value associated with the RtrnCap to be $800 (matching that value from the Inv Performance Rpt. 
• Cross check that cost basis match expected values and that on the Investment Performance Report the Investment and Return column entries for the two securities on 12/9/22 are the same totals ($800 each).  That means that a) cost basis for future sales will be accurate and b) the Average Annual Return figures in total for these two securities in this transaction will be accurate.  

  Hope this helps
  

funkws

Thanks. This is what I was hoping to discover.

jr7107

That's the analysis and work that makes Quicken much easier.

q_lurker

Some follow-up comments:

In this idea post https://community.quicken.com/discussion/7901982 I explained the need or reason for some of the steps I listed above. 

If your brokerage comes up with a different allocation of basis percentage than the Form 8937 derived, you can attempt to derive equivalent prices to plug into the Corporate Spinoff fields.  Alternatively, after the fact, you can edit the RtrnCapX and Add Shares transactions generated to reflect the basis values that your brokerage used.  

Take note of the concern about having multiple lots of the parent company.  In my example and test case, I only had one lot of Brookfield to start.  Quicken using one RtrnCapX transaction as currently programmed will not get the basis of each parent company lot correct after the spinoff.  

Babzee

Can someone comment on the process and prices for Quicken Canada (Toronto stock exchange)?