Novartis Sandoz Spin-off

Curtis Browne

On Oct 4, 2023 Sandoz was spun off from Novartis at 1 new share for every 5 old ones. How do I record this? What values do I use to get the correct cost basis for Sandoz? How do I adjust the cost basis for Novartis (if it is necessary)?

Any help would be appreciated!

Quicken Kristina

Hello @Curtis Browne,

There are 2 different procedures, depending on if the spin-off is taxable or not.

If it is nontaxable, then you would need to follow this procedure (from this article on corporate spin-offs):

1. Open the account you want to use.
2. Click Enter Transactions.
3. In the Enter Transaction list, select Corporate Securities Spin-off.
   
4. Use this dialog to change the security name and price information when a corporation spins off another corporation or entity and when spin-off is determined as nontaxable by the parent company. Click a link below for more information.
   • Security NameEnter the name of the security as it is currently identified in your Quicken transaction list.
   • New CompanyEnter the name of the new corporation or entity that will receive the spin-off shares.
   • New shares issuedEnter the ratio, not a number of shares. For example, if you own 150 shares of the original company and the spin-off ratio is .65 new shares for each old share, you would enter .65 (the ratio), rather than 97.5 (the total number of shares you received).
   • Cost per old shareEnter the fair market value (sometimes called tax basis allocation) per share of your original security, on the date of the spin-off. If you do not have the information, it should be available from the parent company or from news articles on the day of the spin-off.
   • Cost per new shareEnter the fair market value (sometimes called tax basis allocation) per share of the new security (the one that was spun off), on the date of the spin-off. If you do not have the information, it should be available from the parent company or from news articles on the day of the spin-off.
   • MemoFor example, "Nontaxable spin-off on (date)".
5. Click Enter/New to enter another transaction, or Enter/Done to finish.

If the spin-off is taxable, then you would need to do two transactions to document it in Quicken. One to record miscellaneous income and the other to Add the new securities.

I hope this helps!