how to handle - GE spin off of GEV (edit)
Many people are gonna need a how to refresher on this subject, step by step. This is a non taxable spin off according to GE and GE holders will recieve 1 share of Vernova for every 4 shares of GE held. Not sure about unit pricing at the moment of spin off. It may come later . The corporate spin off transaction in Quicken has a field called "new shares issued per old share". Is this a percentage like 25% or .25 or what?. Also what about using the add and remove shares procedures.
Expert help needed . Thanks
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Everything I am seeing indicates this is a straightforward Corporate Spinoff to be effective 4/2/2024. The standard Enter Transactions selection should work adequately (though I have my opinions which I will express in a more timely manner when more specifics are available.). The share ratio will be 0.25. Quicken will need the 'closing' values of April 2 to complete the process.
It is usually prudent to wait beyond that spinoff date to enter data into Quicken. It is usually NOT a good idea to rely on downloaded transactions from a brokerage to get this data into Quicken.
There is a significant difference in how Quicken handles this type of deal when the shares are in one lot versus being in several lots (such as generated by dividend reinvestment plans). How users choose to address specific very much depends on their needs and desires for detail.
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Thank you, what do you think about using 25% of the GE share price as the share price of GEV (at least initially).
Will quicken then reduce the GE cost basis accordingly. Thanks
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No support for that assumption.
Here’s the basic concept on the math:
- GE currently trades at about $175/sh
- Suppose the market values the aerospace portion at $100 of that and the power (Vernova) at $75 of that. (Unsupported assumption on my part, don’t use it)
- After the spin-off GE would drop to $100/sh and GEV would be trading at $300/sh (since there would be 1/4 of the number of shares issued)
- The spin-off process would then transfer 3/7 (= 75/175) of your GE cost basis to your new GEV shares and 4/7 (= 100/175) would remain as the basis of the now lower valued GE shares.
So unless you have a crystal ball as to the value breakdown, wait.
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Thank You,
I'm gonna wait
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Definitely Wait a few days to see what your brokerage does.
There is a specific transaction type labeled 'Corporate Securities Spin-off'
I have attached a screenshot. Note that it needs the CLOSING PRICE for both stocks on the DAY OF the SPIN-OFF.
Also, it is unlikely that your brokerage will impart any fraction of a share to you, Usually full shares only with any fractional share due computed paid out in cash within the next few days.
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Seemed simple enough so I tried this. It added about 70 transactions to the original GE account, did not add a new GEV account. Not sure what I did wrong. Appreciate more feedback or instructions if anyone has any.
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I'm not sure how to transact this spinoff in Quicken. I had 400 shares of GE and that yielded 100 shares of GEV. I don't know what the share price was for the GEV which has to be added in manually. Also, The cost basis for GE is now lower, how to make that right in Quicken?
----Quicken User since 1998 ----
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My experience is that there is a transaction for each transaction existing for the Original transaction.
This process appears to adjust the Cost of EACH prior GE transaction and add the corresponding GEV entry
I have transactions going back 15+ years so the process does seem to take awhile.
DO NOT enter the total shares received…..
Per my Watch List download, the Cost for GE as of yesterday's Close, was $136.47; GEV Close was $140.00
These show as 'Added' transactions'
DO A BACKUP FIRST!!! Read the window closely!!! See above post for clip of window.
Also there appears to be an update that was just posted which may or may not be relevant, the update notes don't seem to point to this process.
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I have the stock prices at close on 4/2 as GE $136.47 and GEV $140. But as I mentioned above, when I used the Corporate Spin-off option as suggested above, it added 70+ transactions to the GE account and no new account for GEV was created. Be sure you have a backup to revert back to if you try the Corporate Spin-off option and it goes sideways as it did for me. I have far fewer shares than you of GE so it could add hundreds of transactions depending on how it goes.
My guess as to the reason for all the transactions added is that Quicken used 70+ previous DIV purchases to make up the value of the new GEV shares. So that resulted in one entry for each of the DIV entries it used.
But I don't know enough to understand why a new account for the new stock was not created. Both GE and GEV transactions were all appearing within the original GE account.0 -
Thank you zot100. I think we're on the same page regarding the transactions and good to have my closing amounts confirmed. Can you also assist with my other question about why a new account for GEV was not created listing the new shares?
Do we now need to create a new account for GEV and add share transactions somehow using the original GE account as the source of the funds, or how does that work?0 -
I added GEV to my Security List First with the Stock Symbol and the Stock Name BEFORE attempting the transaction.
In the Spin off window, I typed out the security name which it appeared to automatically match up.
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Got it. Trying that now.
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did the same thing. tons of transactions added to GE, nothing added for GEV which was in Security List before running the spin-off transaction. I'll keep poking at it later this evening. Thanks for your help with this!
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AFTER: You will see the following.
- A Transaction REMOVING all of your shares of GE.
- An entry for a Cumulative Unearned Gain on those GE Shares
- Each Buy & Div transaction of GE 'Added' back
- with a corresponding GEV Spinoff Transaction
Note the Share Balance column of transactions in the Brokerage account detail and you will see the GE Shares add back up to the original Number of shares. See attached screen shot.
AND you will see the GEV shares add up with each transaction to the total GEV Shares received PLUS any fractional share.
I am assuming I will see a sale of the fractional sale in a few days which will bring the GEV share count back to what was recieved.
Review your 'Holding' to see GE Aerospace & GE VERNOVA with the share counts.
While this looks like a lot a extra transactions, this appears to be restating the cost base for GE Aerospace, and restated the Cost basis of each GEV share received from the spin-off.
AFTER. You may need to Edit the Security from the Security List to add the GEV Symbol after. ( In my case I was also asked if I wanted to merge the Stock Quotes which I accepted )
I have attached a screenshot of the First portion of the transaction detail…. due to the number of transactions you will have to trust me that they add back up to the original 93.193 shares of GE and 23.29825 Shares of GEV. 0.25 GEV shares to 1 GE
After the sale/proceeds from the GEV fractional share 'Sale' the total will be 23 shares of GEV.
I hope this helps.
And by way of disclosure I did have to restore from my yesterday's backup after the first attempt since I put 23 shares in the window for new shares instead of 0.25 shares! So I got to see this work twice and study it out more than if I had done it right the first time.
Good Luck!
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I have owned GE for several years and have quite a history of transactions for dividends, etc.
Here is what I did for the spinoff that "worked" for me.
I did not enter the new security (GEV) before entering the spinoff transaction.
I entered a spinoff transaction for 4/2 using .25 as the "new shares issued" and the closing prices of 4/2 of $136.47 for GE and $140.00 for GEV.
I just temporarily entered the name "GEV" for the "new" company and let Quicken to its thing. Over 42 new transactions were created by Quicken as a result.
On the portfolio view, I right clicked my newly created "GEV" and chose edit security. Quicken found the real GE Vernova Inc. and properly changed it.
The Quicken spinoff transaction entered fractional shares of Vernova, so I just entered a remove shares transaction for the fractional shares.
The end result is that I am showing in Quicken an average cost basis of $74.57 for GEV and Fidelity shows $74.55. Similarly, I am showing in Quicken an average cost basis of $72.80 for GE and Fidelity shows $71.94.
Close enough for me. I'm leaving it as is. Fidelity hasn't posted any cash in lieu of fractional shares yet. When they do, I will add that with a "cash in" transaction.
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@alancgut, Thank you very much for your concise explanation of what worked. I likely will follow your steps exactly. I do have one question though. Why did you make a point about not entering GEV ahead of running the transaction? Is there a known problem with doing that? I've already got GEV listed as a security. Do I need to go back and remove it before running the transaction?
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You should NOT create the GEV security prior to using the Corporate Spinoff macro-transaction. The spinoff action makes the assumption that the old company is creating a new company. If you enter the new company name the same as an existing company in your file, the spinoff action will tell you something is wrong.
Yes, if you have multiple lots of GE acquired by separate purchases, the spinoff action will create a new ADD SHARES of GEV for each lot of GE that you owned. Those of you with long-time dividend reinvestment programs will get a lot of GEV additions.
The process will create GEV shares from the GE shares at the 1 for 4 rate. In the real world, if that results in a fractional share for the total, that fractional share will not be distributed in the real world. You will receive cash-in-lieu (sometimes abbreviated CIL) instead of the fractional share. Example, you had 102.444 shares of GE. You would be due 25.611 shares, but you would only receive 25. You would get cash-in-lieu for the 0.611 shares. By the spinoff action, Quicken will generate the full due number of shares in your account (25.611, in my example). You should maintain that result and when the cash-in-lieu is recorded, sell the fractional shares for that cash-in-lieu amount. That will generate a small capital gain/loss which is reportable for your 2024 tax return and should show up on your 2024 1099B form from your brokerage. In that context, if possible you should determine which lots the brokerage used to determine the sold fractional shares, and you would then apply that same knowledge in your Quicken records.
I'll be doing some follow-up thinking about this spinoff over the next few days and may offer some additional thoughts. Post back if you have other specific questions.
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@q_lurker Thanks for your explanation. Do you have any thoughts on running this same process on the GE Stock Fund in my GE 401K? I gave it try and it looks to be successful. The resulting cost basis was within a few hundred dollars compared to what Fidelity is showing.
----Quicken User since 1998 ----
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@Philip107 As long as the "GE Stock Fund" in your GE 401k trades the same as the GE stock does, I don't see any real problems. I have heard of differences developing between Fidelity IRA accounts and paired Quicken accounts where cost basis gets handled differently.
To all: Using the 1-to-4 ratio and the GE @ 136.47 and GEV @ 140 values, 79.59% of the basis of each lot should remain in the GE holding. The GEV holding for each lot would get 20.41%. There is no requirement (on Fidelity, any financial institution, or investor) to use those two $/share prices and changing either one or both will vary those percentages. The 'requirement' is to use a "Fair Market Value" for the two securities 'immediately' after the spinoff.
The basis kept and basis transferred math using those prices as fair market values are:
- Basis kept in GE lots = GE % = 136.47 / (136.47 + 1/4 * 140) = 136.47 / 171.47 = 79.59%
- Basis transferred to GEV lots = GEV % = 1/4 * 140 / (136.47 + 1/4 * 140) = 35 / 171.47 = 20.41% — also = 1 - 79.59%
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Hello Mr q_lurker and all others: Here is a possible simplified approach: just use "shares added" transaction to add GEV , add GEV to security list first. Get the initial cost from your brokerage later when available.. Do all of this manually if necessary. Note that Fidelity does exactly this thru their downloading to Quicken, execpt for cost which they show as zero right now. Schwab not doing what Fidelity did as of yet. looks like the cost basis for the old GE is the same as it was pre spin off. I have a 25 year history of GE with a zillion buys, sells, dividends etc. I dont want to create a major data dump unless its the only option . I dont know how to change GE Aerospace cost basis . Is Corporate spin off the only option. Some people may not care about cost basis in Quicken .
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@stgd Quicken is flexible enough for anyone to do most anything they want to fit their specific needs. If you don't need the by-lot data on your new GEV holding, one 'simple' Add Shares of that new holding can work for you. That can match what your brokerages tell you your cost basis is today, but going forward as you might choose to sell various shares, the data will diverge. Maybe you don't care now. Will you in the future?
Gotta wonder how you handled the GE Healthcare spinoff last year. Can't see a lot of rationale to doing anything different with this event.
The 'sells' among your 'zillions' of transactions don't matter other than by eliminating some of the lots previously acquired. The 'dividends' only matter if they were reinvested to acquire more shares, and those shares acquired by reinvestment have not been sold.
You can 'adjust' the GE basis three different ways that I can think of off the top.
- One RtrnCapX transaction for the total adjustment amount. The X-transfer account is the same account getting the transaction. This will not adjust the lot by lot basis amounts correctly for this event, but you will have the total right. By lot, shares and date acquired correct, cost per lot wrong; total cost right.
- One Remove shares for all GE shares and one Add Shares for all GE shares adding them back in with the correct total basis and whatever acquisition date you choose. By lot, shares, date acquired, and cost lost; total cost and total shares correct.
- One Remove shares for all GE shares and one Add Shares for each lot which is what the Corporate Spinoff action generates. By lot, shares, date acquired, and cost all correct; totals all correct.
I never rely on the brokerages to get it right. While Fidelity has now (apparently) downloaded you Added Shares, I doubt they will ever send a 'transaction' that updates the cost basis of those shares. There is no real mechanism in the communication links to do so that I am aware of. The onus will be on you to make that 'correction'. They will make the correction on a lot by lot basis behind the scenes.
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Thank You, For GEHC spin off I used add shares. It did and has worked well except for cost basis is wrong vs Brokerages. I think brokerages data are important because they report it to the IRS as far as i know. I am not too interested in lot by lot basis amounts. If I sell I would use average unit cost. If I get up enough courage I would try one of your 3 cost basis adjustment techniques above. Thanks
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Anyone else have Schwab brokerage account? I'm looking at the lots and cost basis of GEV on their site and the cost basis for the spin-off shares of GEV are $0. Ditto for the fractional share they sold. My realized gain is the full amount as $0 on the cost basis. This is NOT how it worked for the GEHC spin-off last year but the platform was TD Ameritrade then. IMO Schwab does a terrible job on the download of this type of info. I usually have to delete their import and do the corporate spin-off option. Their fractional share merely comes in as a deposit of a lump amount, but I digress.
If you have Schwab, do you see what I'm seeing? Will they maybe go back later and update the cost basis? If you have had this happen before and it's just a delay, I'm good to just wait to put the transactions in Quicken.
Thanks
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@q_lurker, I ran the Corporate spinoff as suggested. I was expecting to have to run it two times, as I hold GE in two separate accounts. It ran the spinoff for both accounts, but something looks to be screwed up. When I look at the entries in the Schwab account, the very first entry is the removal of the share holdings contained in the DRIP account. This results in the final share quantity in Schwab being too low by that amount. And the DRIP account does not have a Shares removed entry as part of the spinoff adjustment, so it also is wrong (too high) by that same amount. Should I just delete the DRIP shares removed entry from the Schwab account, and put it in the DRIP account, or will that screw something else up? Any thoughts on what may have caused this (besides me I mean)?
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I ran the Corporate spinoff as suggested. I was expecting to have to run it two times, as I hold GE in two separate accounts. It ran the spinoff for both accounts, …
Yes, when you enter a Corporate Spin-off, the spinoff gets applied in all accounts holding the parent company at that time. Good and rational behavior in their programming.
When I look at the entries in the Schwab account, the very first entry is the removal of the share holdings contained in the DRIP account. …
The two separate Quicken accounts - Schwab and DRIP, correct? I can’t imagine how or why the DRIP remove ended up in the Schwab account. But, yes, you should be able to delete it from the Schwab account and enter the same in the DRIP account.
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@shelquis on your Schwab account website, can you check the new lots of GEV you got and tell me if they have a cost basis on them? I'm with Schwab too and the basis shows as zero which seems incorrect.
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My Schwab account shows zero cost basis for GE Vernova, while it correctly shows the cost basis for my GE stock.
Running the Quicken spinoff transaction provides cost bases for the GEV stock lots, which I will forward to Schwab for them to correct my account.0 -
@shelquis ok thank you for confirming you're seeing the same at Schwab. I thought it odd and thought maybe they just didn't update the basis yet. I find their site challenging to use after having used TDA's for years. Could drill down much better into the lots, cost basis as well as unrealized gains.
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I completely agree.0 -
@shelquis is having to get Schwab to correct cost basis after a corporate spin off a regular thing? This is the first corporate spin off I’ve gone through since getting migrated from Ameritrade to Schwab. As @Pacificagurl mentioned, the lot info was so much better on the Ameritrade site than it is on the Schwab site.
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