Recording Corporate Spinoffs

Flying99

Hello,

I hope someone can help answer this problem. I am trying to record a Corporate Spinoff, but the dialog boxes don't make a lot of sense. So, MDU spun off KNF on May 31 as a new company. The ratio was 1 new share for every 4 shares owned. So, when I go to try to enter this, I have a box which asks for "cost per old share" and then "cost per new share". Since this is a new company there is no cost for old shares, and which cost do I enter for cost per new share since they didn't actually cost me anything.

I tried entering this for MDU, but as this is a dividend reinvestment plan the program generated over a hundred entries and I have no idea whether the data is good or not. [Frankly I don't really want to see this breakdown, it would be great if it could be done and held in the background.] Can someone please walk me through this? I should be every so grateful.

Tom Young

"I have a box which asks for "cost per old share" and then "cost per new share"."

Window user here.

You (Quicken) allocate cost between the parent co and the child co based on the value of your holdings of each right after the spin off. What you need to do the calculation is the number of shares of each company after the spin off (# of shares stays the same for parent co, # of shares of child co depends on the ratio used for the deal) and the parent's and child's per share fair market value. So what those boxes REALLY are asking for is that "per share fair market value" number.

The Windows spin-off wizard has similar (confusing) wording and I think they just used that same terminology in the Mac version.