How to handle the NCR spinoff VYX/NATL yesterday 10-17-2023
Yesterday 10-17-2023 NCR did a rename, stock split (1:1.5) spinoff NCR to VYX (1) and NATL (.5). In Quicken (windows) investments, I tried using the Corporate spinoff transaction but that made a mess. What transaction could be used to record this NCR spinoff, stock split event?
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You received 1 share of the spin-off company NCR ATLEOS (Ticker Symbol NATL) for every 2 shares of NCR stock you owned which changed from NCR Corp. (Ticker Symbol NCR) to NCR VOYIX (Ticker Symbol VYX). I would like to know what you entered for every field in the Quicken Corporate Security Spin-Off transaction to preserve correct cost basis on every lot. Thank-you for your expertise and thoughtful consideration of tis matter.
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If only it were so simple …
to preserve correct cost basis on every lot
Presumably, that means correct according to your financial institution (FI) aka brokerage. That then requires knowing what equivalent values they used, or what percentage of NCR cost basis passed on to the Atleos shares, and it presumes the FI has established those values at this point to the extent they see them as final. It also presumes you have direct access to the per lot basis of all lots at this time. All that means there may not be a single simple answer. Ultimately it is the investor's responsibility to decide the fair market values of the two ongoing entities, though in reality, that us usually deferred to the FI.
The common advice is to defer these dtails until NCR (VYX) published their IRS Form 8937 for this deal.
Let's say you decide upon the closing values for October 17 — VYX @ 16.18/sh; NATL @ 21.34/sh. That leads to 66.42457% of the basis transferring from NCR to NATL (Atleos). If that is the 'correct' percentage for you, use those two figures.
If your FI is effectively showing a different percentage (PC), I suggest keeping the NATL closing (21.34) and back-calculating a different value for NCR (VYX) as:
FMV(NCR) = (1 - PC) / PC x 1.5 x 21.34
Example: If the FI reports the percentage as 67.5%, you would compute the NCR fair market value as
FMV(NCR) = (1 - 0.675) / 0.675 x 1.5 x 21.34 = 15.412. Since the price field will take up to 6 decimals be as precise as you choose to or need to be.
But as a further note, you also need to be conscious of fractional shares. If you had 25 shares of NCR, you are due 37.5 shares of NATL. But you will only receive 37 shares and then get the missing 0.5 shares as cash-in-lieu. Your FI information MAY be only showing the full shares and not reflecting the basis associated to the missing fractional share. As such, determining the transferred basis should be considering only the NCR (VYX) holding. What was its October 16 basis? What is its October 17 (or later) basis. The difference is what was transferred to NATL and that is how you should determine what percent was transferred.
For a multi-lot holding of NCR, that Corporate Securities spinoff will generate multiple Add Shares of both NCR and NATL. You can edit any of those Add Shares to 'revise' the basis of each lot if you choose to (or need to). If you get the overall percentage right from the start, you should not need to. For a single lot of NCR, only Add Shares for the NATL shares will be created.
A 'gotcha' that can develop is if you have already downloaded from the FI and thus already have NATL as a security in your Quicken file. In such a case, I suggest:
- Back up your data file
- Delete the downloaded transactions of NATL
- Delete the NATL security
- Use the Corporate Security Spinoff to regenerate the Atleos security
- Edit the newly created Atleos security to assign the ticker (NATL) to it.
- Now you can download from the FI again or work through the Tools / Online center to recreate the matching between your Quicken file NATL security and the FI's version of the same.
The other 'gotcha' in this deal is the change from NCR Corporation to NCR Voyix Corporation. I would choose to make those two changes BEFORE going through the spinoff action. Just changing the name and ticker would be fine by me though some users might chose to create a separate security such that NCR pre-October 17 would be different than NCR Voyix post-October 17. Users choice.
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Please see my comments in this discussion.
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q_lurker,
I used the closing values for October 17 — VYX @ 16.18/sh; NATL @ 21.34/sh like you mentioned above before I posted my question using the Quicken Corporare Securities Spin-Off transaction. After it was completed (Multiple Lots) my Avg $ Cost per Share went from $7.157002 to a Negative $ Amt. I also had changed the name of NCR Secrity to NCR VOYIX & ticker symbol VYX prior to the Corporare Securities Spin-Off transaction. Also, I had not downloaded or created any NCR ATLEOS security. So, I restored my previous Quicken file and posted question. Any ideas why a Negative $ Amt. or how to fix that?
Thanks for any help or advice.
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Any ideas why a Negative $ Amt. or how to fix that?
Part 1, no idea why.
Part 2: I would first review the cost basis of each lot of VYX that you are showing before the spinoff. Do all those values make sense both individually for each lot and in total.
If, so, I'd proceed with the spinoff as you did it. Same result? Then start lot by lot. Does the basis for the oldest lot of VYX plus the basis f the oldest lot of NATL equal the basis of the original oldest lot of VYX? That is, try to figure out where something is going wrong. Also, does the breakdown of the two match the 65.42… % I computed above.
You are citing Average Cost per share post spinoff. How do the total cost basis figures align - before vs total after?
Is there a chance you have used average cost for sales of any shares or is that somehow checked for the now VYX security? (It should not be and probably cannot be unless you have mis-Typed the security as a Mutual Fund.)
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NCR Voyix has posted IRS Form 8937 for this transaction on their IR website which may be helpful in determining a "defensible" basis.
It's the November 3, 2023 item at https://investor.ncr.com/irs-form-8937-3
The PDF of the form for this transaction can be found at https://investor.ncr.com/static-files/65f059ed-b4d8-448c-98ed-cc385ba5b312
Of course follow all the caveats, warnings, disclaimers, etc on the form!
(Sorry I couldn't post actual clickable links to the URLs above because apparently I've not posted enough here to be trusted to do so).
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