Automatic Data Processing (ADP) Spinoff of CDK Global, Inc (CDK)

splashersplasher SuperUser
edited October 2018 in

I know this will be asked several times in the following days, so let this be the main post on this topic.

The split consists of 1 share of CDK for every three shares of ADP. Any partial shares will be covered by cash in lieu of partial share.

What I don't know at this time is the share prices used for the Corporate Spinoff transaction wizard.

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Comments

  • q_lurkerq_lurker SuperUser
    edited October 2018

    Step one is to wait for ADP to publish their 8937 for for the event. By law, they are required to do so within 45 days. For this simple of a transaction, I would expect it to be much sooner. That document will show their computation and determination of fair market values for the spinoff and it will show how the ADP shareholders basis in ADP should be allocated to ADP and CDK. I would expect those fair market values to be in the $73 range for ADP and $31 range for CDK. Those two specific values would lead to 87.6% of the basis staying with ADP and 12.4% getting moved to the new CDK holding.


    The math: 73 / (73 + 31/3) = 0.876 and (31/3) / (73 + 31/3) = 0.124


    Step two will be to decide how you - the user - wants this entered. Two options from among several:
    1. Enter a Corporate Securities Spin-off transaction (Enter transactions button) from within the account holding the ADP shares. Transaction date is Sept 30, 2014. Enter the two fair market values from the Form 8937 as the respective 'cost' of the companies and enter 0.333333 for the New Shares issued field. Note that this method backdates transactions and thus may make your historical pictures inaccurate. I do not care for this method, but it is simple.
    2. Do some math ahead of time using the percentages established in the Form 8937 to determine the the proper basis for each lot of ADP and CDK that you own after the spinoff. Enter a Remove Shares transaction for all ADP shares dated 9/30/14. Enter a pair of Add Shares transactions (Add Shares of ADP and Add Shares of CDK) for each lot of ADP that you held. The ADP add will be for the same number of ADP in that lot; the CDK shares will be for 1/3 of that share quantity. The 'cost basis' for each of those Add Shares transactions will be determined using the percentages from the Form 8937. All these transactions would be dated 9/30/14.
    After whatever entry method you choose, sell the fractional shares for the cash-in-lieu amount you received.


    At such time as the data gets clearly established, I'll try to post an example or further information.
  • splashersplasher SuperUser
    edited December 2016
    q.lurker said:


    Step one is to wait for ADP to publish their 8937 for for the event. By law, they are required to do so within 45 days. For this simple of a transaction, I would expect it to be much sooner. That document will show their computation and determination of fair market values for the spinoff and it will show how the ADP shareholders basis in ADP should be allocated to ADP and CDK. I would expect those fair market values to be in the $73 range for ADP and $31 range for CDK. Those two specific values would lead to 87.6% of the basis staying with ADP and 12.4% getting moved to the new CDK holding.


    The math: 73 / (73 + 31/3) = 0.876 and (31/3) / (73 + 31/3) = 0.124


    Step two will be to decide how you - the user - wants this entered. Two options from among several:


    1. Enter a Corporate Securities Spin-off transaction (Enter transactions button) from within the account holding the ADP shares. Transaction date is Sept 30, 2014. Enter the two fair market values from the Form 8937 as the respective 'cost' of the companies and enter 0.333333 for the New Shares issued field. Note that this method backdates transactions and thus may make your historical pictures inaccurate. I do not care for this method, but it is simple.
    2. Do some math ahead of time using the percentages established in the Form 8937 to determine the the proper basis for each lot of ADP and CDK that you own after the spinoff. Enter a Remove Shares transaction for all ADP shares dated 9/30/14. Enter a pair of Add Shares transactions (Add Shares of ADP and Add Shares of CDK) for each lot of ADP that you held. The ADP add will be for the same number of ADP in that lot; the CDK shares will be for 1/3 of that share quantity. The 'cost basis' for each of those Add Shares transactions will be determined using the percentages from the Form 8937. All these transactions would be dated 9/30/14.
    After whatever entry method you choose, sell the fractional shares for the cash-in-lieu amount you received.


    At such time as the data gets clearly established, I'll try to post an example or further information.
    q.lurker, great info, I knew you would come through with something that would help a lot of users.
    -splasher  using Q since 1996 -  QW2016, 2017 & Subscription  -  Win7/Win10
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  • edited July 2016
    q.lurker said:


    Step one is to wait for ADP to publish their 8937 for for the event. By law, they are required to do so within 45 days. For this simple of a transaction, I would expect it to be much sooner. That document will show their computation and determination of fair market values for the spinoff and it will show how the ADP shareholders basis in ADP should be allocated to ADP and CDK. I would expect those fair market values to be in the $73 range for ADP and $31 range for CDK. Those two specific values would lead to 87.6% of the basis staying with ADP and 12.4% getting moved to the new CDK holding.


    The math: 73 / (73 + 31/3) = 0.876 and (31/3) / (73 + 31/3) = 0.124


    Step two will be to decide how you - the user - wants this entered. Two options from among several:


    1. Enter a Corporate Securities Spin-off transaction (Enter transactions button) from within the account holding the ADP shares. Transaction date is Sept 30, 2014. Enter the two fair market values from the Form 8937 as the respective 'cost' of the companies and enter 0.333333 for the New Shares issued field. Note that this method backdates transactions and thus may make your historical pictures inaccurate. I do not care for this method, but it is simple.
    2. Do some math ahead of time using the percentages established in the Form 8937 to determine the the proper basis for each lot of ADP and CDK that you own after the spinoff. Enter a Remove Shares transaction for all ADP shares dated 9/30/14. Enter a pair of Add Shares transactions (Add Shares of ADP and Add Shares of CDK) for each lot of ADP that you held. The ADP add will be for the same number of ADP in that lot; the CDK shares will be for 1/3 of that share quantity. The 'cost basis' for each of those Add Shares transactions will be determined using the percentages from the Form 8937. All these transactions would be dated 9/30/14.
    After whatever entry method you choose, sell the fractional shares for the cash-in-lieu amount you received.


    At such time as the data gets clearly established, I'll try to post an example or further information.
    Although over in the TT "Community" I usually refer to the Form 8937 when discussing these deals, just to avoid confusion, I don't believe it's really necessary to use those numbers for you basis allocation.  The IRS requires you to split the basis based on the "fair market basis" of your holdings after the consummation of the transaction, but doesn't specify a "cook book" method of determining this.  So I've never waited for the publication of the Form 8937 when recording spin offs in my own records; I simply use a reasonable method and go for it.  q.lurker's second method is the best process from the standpoint of "downstream" errors cropping up.
  • old_dogold_dog Member
    edited July 2016
    q.lurker said:


    Step one is to wait for ADP to publish their 8937 for for the event. By law, they are required to do so within 45 days. For this simple of a transaction, I would expect it to be much sooner. That document will show their computation and determination of fair market values for the spinoff and it will show how the ADP shareholders basis in ADP should be allocated to ADP and CDK. I would expect those fair market values to be in the $73 range for ADP and $31 range for CDK. Those two specific values would lead to 87.6% of the basis staying with ADP and 12.4% getting moved to the new CDK holding.


    The math: 73 / (73 + 31/3) = 0.876 and (31/3) / (73 + 31/3) = 0.124


    Step two will be to decide how you - the user - wants this entered. Two options from among several:


    1. Enter a Corporate Securities Spin-off transaction (Enter transactions button) from within the account holding the ADP shares. Transaction date is Sept 30, 2014. Enter the two fair market values from the Form 8937 as the respective 'cost' of the companies and enter 0.333333 for the New Shares issued field. Note that this method backdates transactions and thus may make your historical pictures inaccurate. I do not care for this method, but it is simple.
    2. Do some math ahead of time using the percentages established in the Form 8937 to determine the the proper basis for each lot of ADP and CDK that you own after the spinoff. Enter a Remove Shares transaction for all ADP shares dated 9/30/14. Enter a pair of Add Shares transactions (Add Shares of ADP and Add Shares of CDK) for each lot of ADP that you held. The ADP add will be for the same number of ADP in that lot; the CDK shares will be for 1/3 of that share quantity. The 'cost basis' for each of those Add Shares transactions will be determined using the percentages from the Form 8937. All these transactions would be dated 9/30/14.
    After whatever entry method you choose, sell the fractional shares for the cash-in-lieu amount you received.


    At such time as the data gets clearly established, I'll try to post an example or further information.
    i also like method 2. for each pair of Add Shares transactions, i think you also want to adjust the "date acquired" to reflect the date of the original ADP lot, to preserve the correct cap gains status...right?
  • q_lurkerq_lurker SuperUser
    edited December 2016
    q.lurker said:


    Step one is to wait for ADP to publish their 8937 for for the event. By law, they are required to do so within 45 days. For this simple of a transaction, I would expect it to be much sooner. That document will show their computation and determination of fair market values for the spinoff and it will show how the ADP shareholders basis in ADP should be allocated to ADP and CDK. I would expect those fair market values to be in the $73 range for ADP and $31 range for CDK. Those two specific values would lead to 87.6% of the basis staying with ADP and 12.4% getting moved to the new CDK holding.


    The math: 73 / (73 + 31/3) = 0.876 and (31/3) / (73 + 31/3) = 0.124


    Step two will be to decide how you - the user - wants this entered. Two options from among several:


    1. Enter a Corporate Securities Spin-off transaction (Enter transactions button) from within the account holding the ADP shares. Transaction date is Sept 30, 2014. Enter the two fair market values from the Form 8937 as the respective 'cost' of the companies and enter 0.333333 for the New Shares issued field. Note that this method backdates transactions and thus may make your historical pictures inaccurate. I do not care for this method, but it is simple.
    2. Do some math ahead of time using the percentages established in the Form 8937 to determine the the proper basis for each lot of ADP and CDK that you own after the spinoff. Enter a Remove Shares transaction for all ADP shares dated 9/30/14. Enter a pair of Add Shares transactions (Add Shares of ADP and Add Shares of CDK) for each lot of ADP that you held. The ADP add will be for the same number of ADP in that lot; the CDK shares will be for 1/3 of that share quantity. The 'cost basis' for each of those Add Shares transactions will be determined using the percentages from the Form 8937. All these transactions would be dated 9/30/14.
    After whatever entry method you choose, sell the fractional shares for the cash-in-lieu amount you received.


    At such time as the data gets clearly established, I'll try to post an example or further information.
    Correct.  Set both the Acquisition dates and the cost info as required for the applicable lot.
  • q_lurkerq_lurker SuperUser
    edited December 2016
    q.lurker said:


    Step one is to wait for ADP to publish their 8937 for for the event. By law, they are required to do so within 45 days. For this simple of a transaction, I would expect it to be much sooner. That document will show their computation and determination of fair market values for the spinoff and it will show how the ADP shareholders basis in ADP should be allocated to ADP and CDK. I would expect those fair market values to be in the $73 range for ADP and $31 range for CDK. Those two specific values would lead to 87.6% of the basis staying with ADP and 12.4% getting moved to the new CDK holding.


    The math: 73 / (73 + 31/3) = 0.876 and (31/3) / (73 + 31/3) = 0.124


    Step two will be to decide how you - the user - wants this entered. Two options from among several:


    1. Enter a Corporate Securities Spin-off transaction (Enter transactions button) from within the account holding the ADP shares. Transaction date is Sept 30, 2014. Enter the two fair market values from the Form 8937 as the respective 'cost' of the companies and enter 0.333333 for the New Shares issued field. Note that this method backdates transactions and thus may make your historical pictures inaccurate. I do not care for this method, but it is simple.
    2. Do some math ahead of time using the percentages established in the Form 8937 to determine the the proper basis for each lot of ADP and CDK that you own after the spinoff. Enter a Remove Shares transaction for all ADP shares dated 9/30/14. Enter a pair of Add Shares transactions (Add Shares of ADP and Add Shares of CDK) for each lot of ADP that you held. The ADP add will be for the same number of ADP in that lot; the CDK shares will be for 1/3 of that share quantity. The 'cost basis' for each of those Add Shares transactions will be determined using the percentages from the Form 8937. All these transactions would be dated 9/30/14.
    After whatever entry method you choose, sell the fractional shares for the cash-in-lieu amount you received.


    At such time as the data gets clearly established, I'll try to post an example or further information.
    ADP has now published this information:
    http://files.shareholder.com/downloads/ADP/3514493800x0x784785/15DD2E3B-C97A-49DF-BB31-794E673B43F5/ADP-CDK_Shareholders_re_Basis_final_.pdf

    Although not a formal Form 8937, it appears to present the same effective information.  To wit:
    They choose to use closing prices on 10/1/14 as their computational basis.  From Yahoo Finance, I see those as $71.42 and $31.00 per share for ADP and CDK respectively.  Those values lead to the 87.36 and 12.64% values applicable for splitting the original ADP cost basis to the two ongoing entities.
  • Jason DukeJason Duke Member
    edited July 2016
    q.lurker said:


    Step one is to wait for ADP to publish their 8937 for for the event. By law, they are required to do so within 45 days. For this simple of a transaction, I would expect it to be much sooner. That document will show their computation and determination of fair market values for the spinoff and it will show how the ADP shareholders basis in ADP should be allocated to ADP and CDK. I would expect those fair market values to be in the $73 range for ADP and $31 range for CDK. Those two specific values would lead to 87.6% of the basis staying with ADP and 12.4% getting moved to the new CDK holding.


    The math: 73 / (73 + 31/3) = 0.876 and (31/3) / (73 + 31/3) = 0.124


    Step two will be to decide how you - the user - wants this entered. Two options from among several:


    1. Enter a Corporate Securities Spin-off transaction (Enter transactions button) from within the account holding the ADP shares. Transaction date is Sept 30, 2014. Enter the two fair market values from the Form 8937 as the respective 'cost' of the companies and enter 0.333333 for the New Shares issued field. Note that this method backdates transactions and thus may make your historical pictures inaccurate. I do not care for this method, but it is simple.
    2. Do some math ahead of time using the percentages established in the Form 8937 to determine the the proper basis for each lot of ADP and CDK that you own after the spinoff. Enter a Remove Shares transaction for all ADP shares dated 9/30/14. Enter a pair of Add Shares transactions (Add Shares of ADP and Add Shares of CDK) for each lot of ADP that you held. The ADP add will be for the same number of ADP in that lot; the CDK shares will be for 1/3 of that share quantity. The 'cost basis' for each of those Add Shares transactions will be determined using the percentages from the Form 8937. All these transactions would be dated 9/30/14.
    After whatever entry method you choose, sell the fractional shares for the cash-in-lieu amount you received.


    At such time as the data gets clearly established, I'll try to post an example or further information.
    Oy, dividend reinvestment means so many individual lots to update. I really wish Intuit would solve this with a wizard that does the heavy lifting without the backdated transactions.
  • splashersplasher SuperUser
    edited December 2016
    q.lurker said:


    Step one is to wait for ADP to publish their 8937 for for the event. By law, they are required to do so within 45 days. For this simple of a transaction, I would expect it to be much sooner. That document will show their computation and determination of fair market values for the spinoff and it will show how the ADP shareholders basis in ADP should be allocated to ADP and CDK. I would expect those fair market values to be in the $73 range for ADP and $31 range for CDK. Those two specific values would lead to 87.6% of the basis staying with ADP and 12.4% getting moved to the new CDK holding.


    The math: 73 / (73 + 31/3) = 0.876 and (31/3) / (73 + 31/3) = 0.124


    Step two will be to decide how you - the user - wants this entered. Two options from among several:


    1. Enter a Corporate Securities Spin-off transaction (Enter transactions button) from within the account holding the ADP shares. Transaction date is Sept 30, 2014. Enter the two fair market values from the Form 8937 as the respective 'cost' of the companies and enter 0.333333 for the New Shares issued field. Note that this method backdates transactions and thus may make your historical pictures inaccurate. I do not care for this method, but it is simple.
    2. Do some math ahead of time using the percentages established in the Form 8937 to determine the the proper basis for each lot of ADP and CDK that you own after the spinoff. Enter a Remove Shares transaction for all ADP shares dated 9/30/14. Enter a pair of Add Shares transactions (Add Shares of ADP and Add Shares of CDK) for each lot of ADP that you held. The ADP add will be for the same number of ADP in that lot; the CDK shares will be for 1/3 of that share quantity. The 'cost basis' for each of those Add Shares transactions will be determined using the percentages from the Form 8937. All these transactions would be dated 9/30/14.
    After whatever entry method you choose, sell the fractional shares for the cash-in-lieu amount you received.


    At such time as the data gets clearly established, I'll try to post an example or further information.
    @q.lurker  Once again, you came through with great information.  Thanks.
    -splasher  using Q since 1996 -  QW2016, 2017 & Subscription  -  Win7/Win10
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  • q_lurkerq_lurker SuperUser
    edited December 2016
    q.lurker said:


    Step one is to wait for ADP to publish their 8937 for for the event. By law, they are required to do so within 45 days. For this simple of a transaction, I would expect it to be much sooner. That document will show their computation and determination of fair market values for the spinoff and it will show how the ADP shareholders basis in ADP should be allocated to ADP and CDK. I would expect those fair market values to be in the $73 range for ADP and $31 range for CDK. Those two specific values would lead to 87.6% of the basis staying with ADP and 12.4% getting moved to the new CDK holding.


    The math: 73 / (73 + 31/3) = 0.876 and (31/3) / (73 + 31/3) = 0.124


    Step two will be to decide how you - the user - wants this entered. Two options from among several:


    1. Enter a Corporate Securities Spin-off transaction (Enter transactions button) from within the account holding the ADP shares. Transaction date is Sept 30, 2014. Enter the two fair market values from the Form 8937 as the respective 'cost' of the companies and enter 0.333333 for the New Shares issued field. Note that this method backdates transactions and thus may make your historical pictures inaccurate. I do not care for this method, but it is simple.
    2. Do some math ahead of time using the percentages established in the Form 8937 to determine the the proper basis for each lot of ADP and CDK that you own after the spinoff. Enter a Remove Shares transaction for all ADP shares dated 9/30/14. Enter a pair of Add Shares transactions (Add Shares of ADP and Add Shares of CDK) for each lot of ADP that you held. The ADP add will be for the same number of ADP in that lot; the CDK shares will be for 1/3 of that share quantity. The 'cost basis' for each of those Add Shares transactions will be determined using the percentages from the Form 8937. All these transactions would be dated 9/30/14.
    After whatever entry method you choose, sell the fractional shares for the cash-in-lieu amount you received.


    At such time as the data gets clearly established, I'll try to post an example or further information.
    dukejansen:  I agree that Intuit should improve the spinoff action.  In the meantime ...

    If you want to experiment, there are some ways you can get Quicken to do more of the grunt work for you -- I think.  I have not worked through these steps, but theoretically, they should work.  Be sure to make a backup so that you have a recovery point.  

    First I would create a new brokerage account of the same type applicable for this spinoff.  This will be a temporary account that will get deleted at the end, so specific details are not too critical.

    Do a Shares Transferred of the ADP shares to the new account dated on the appropriate day (9/30/14).  This will generate a Remove Shares in the old account (which you will keep) and create the right holdings lot-by-lot in the new account.  Check that the lot cost basis and share quantities are correct in the new account.  (I have no reason to question them, but you should be checking along the way.)

    Execute the spinoff in the new account with the proper share ratio and costs (fair market values).  Transaction date is 9/30/14).  
    Check again that the holdings for both ADP and CDK are correct - CDK shares are 1/3 of the ADP shares, cost basis on each lot is the 87%/13% split.  Don't worry about the backdating of transactions in this account.  

    Now do a Shares Transferred from the new account back to the old account again dated 9/30/14.  That should do the two Remove Shares in the new account for ADP and CDK.  More importantly, it should generate a bunch of Add Shares in the old account reflecting the proper lot acquisition dates and cost basis info for each lot of both companies.  Once more, check thoroughly.  

    Now you should be able to delete the 'new account'.  I'd probably delete all the transactions in it first, but I am not sure that really is necessary.  

    Now the old account should stand on its own.  There is a Remove Shares of all ADP followed by all the Add Shares of ADP and CDK - lot by lot - all 'correctly dates to 9/30/14.  The memo lines will refer to transfers to or from this 'new' account.  You may want to note somehow somewhere what really took place.

    Now you can do the sell of fractional CDK shares for the cash-in-lieu amount.

    For one or two lots, I am not sure this makes sense, but for a security that has had a DRP active for several years, it may be pretty effective.  

    Let me know if you try this and how it works.
  • splashersplasher SuperUser
    edited December 2016
    q.lurker said:


    Step one is to wait for ADP to publish their 8937 for for the event. By law, they are required to do so within 45 days. For this simple of a transaction, I would expect it to be much sooner. That document will show their computation and determination of fair market values for the spinoff and it will show how the ADP shareholders basis in ADP should be allocated to ADP and CDK. I would expect those fair market values to be in the $73 range for ADP and $31 range for CDK. Those two specific values would lead to 87.6% of the basis staying with ADP and 12.4% getting moved to the new CDK holding.


    The math: 73 / (73 + 31/3) = 0.876 and (31/3) / (73 + 31/3) = 0.124


    Step two will be to decide how you - the user - wants this entered. Two options from among several:


    1. Enter a Corporate Securities Spin-off transaction (Enter transactions button) from within the account holding the ADP shares. Transaction date is Sept 30, 2014. Enter the two fair market values from the Form 8937 as the respective 'cost' of the companies and enter 0.333333 for the New Shares issued field. Note that this method backdates transactions and thus may make your historical pictures inaccurate. I do not care for this method, but it is simple.
    2. Do some math ahead of time using the percentages established in the Form 8937 to determine the the proper basis for each lot of ADP and CDK that you own after the spinoff. Enter a Remove Shares transaction for all ADP shares dated 9/30/14. Enter a pair of Add Shares transactions (Add Shares of ADP and Add Shares of CDK) for each lot of ADP that you held. The ADP add will be for the same number of ADP in that lot; the CDK shares will be for 1/3 of that share quantity. The 'cost basis' for each of those Add Shares transactions will be determined using the percentages from the Form 8937. All these transactions would be dated 9/30/14.
    After whatever entry method you choose, sell the fractional shares for the cash-in-lieu amount you received.


    At such time as the data gets clearly established, I'll try to post an example or further information.
    @q.lurker Slick idea.  I tried this starting with a restored backup from 10/1.  I found that the xfer to the temp account added .03 to the total basis somewhere which would have been easy enough to find and the spin-off shifted the basis by a few cents again, but it was an entirely doable process and created all of the right transactions.
    The only thing I saw at possible issue was that the "Amount Invested" got doubled (the original and the xfer back in).

    If you were to delete the original transactions, the AI would be correct, but then you would lose the "Amount Reinvested".
    -splasher  using Q since 1996 -  QW2016, 2017 & Subscription  -  Win7/Win10
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  • q_lurkerq_lurker SuperUser
    edited December 2016
    q.lurker said:


    Step one is to wait for ADP to publish their 8937 for for the event. By law, they are required to do so within 45 days. For this simple of a transaction, I would expect it to be much sooner. That document will show their computation and determination of fair market values for the spinoff and it will show how the ADP shareholders basis in ADP should be allocated to ADP and CDK. I would expect those fair market values to be in the $73 range for ADP and $31 range for CDK. Those two specific values would lead to 87.6% of the basis staying with ADP and 12.4% getting moved to the new CDK holding.


    The math: 73 / (73 + 31/3) = 0.876 and (31/3) / (73 + 31/3) = 0.124


    Step two will be to decide how you - the user - wants this entered. Two options from among several:


    1. Enter a Corporate Securities Spin-off transaction (Enter transactions button) from within the account holding the ADP shares. Transaction date is Sept 30, 2014. Enter the two fair market values from the Form 8937 as the respective 'cost' of the companies and enter 0.333333 for the New Shares issued field. Note that this method backdates transactions and thus may make your historical pictures inaccurate. I do not care for this method, but it is simple.
    2. Do some math ahead of time using the percentages established in the Form 8937 to determine the the proper basis for each lot of ADP and CDK that you own after the spinoff. Enter a Remove Shares transaction for all ADP shares dated 9/30/14. Enter a pair of Add Shares transactions (Add Shares of ADP and Add Shares of CDK) for each lot of ADP that you held. The ADP add will be for the same number of ADP in that lot; the CDK shares will be for 1/3 of that share quantity. The 'cost basis' for each of those Add Shares transactions will be determined using the percentages from the Form 8937. All these transactions would be dated 9/30/14.
    After whatever entry method you choose, sell the fractional shares for the cash-in-lieu amount you received.


    At such time as the data gets clearly established, I'll try to post an example or further information.
    The Amount Invested (an abysmal parameter as implemented in QW for all but buy and hold circumstances) gets doubled because the AI for the original shares is kept and then the Add Shares transactions add to that original value.  Actually, I would expect the AI to more than double.  

    What I'd expect QW to do (expect as in based on how I understand it to be currently programmed, not what I'd like it to do)
    You bought ADP $100, Basis = 100 AI = 100
    You reinvested ADP $10, Basis = 110, AI = 100, AReinv = 10
    Spinoff occurs / Remove shares & Add Shares
    Add ADP shares Basis = $96, AI = $196 (original 100 + 96 from basis in Add Shares transactions), AReinv = "I don't know" ... Still $10?
    Add CDK shares Basis = $14, AI = $14, ARinv = 0

    What should your AI in ADP and CDK be?  $87 and $13?  Why?  What if you had previously sold some of the original purchase?

    My suggestion is to never concern yourself with Amount Invested or Amount Reinvested parameters in Quicken.  For anything beyond the simplest cases, they are not likely to be meaningful.  

    You might also note that a simple action of transferring shares from one account to another blows up both AI and AReinv.

    Glad to hear the basic system works OK.
  • edited July 2016
    q.lurker said:


    Step one is to wait for ADP to publish their 8937 for for the event. By law, they are required to do so within 45 days. For this simple of a transaction, I would expect it to be much sooner. That document will show their computation and determination of fair market values for the spinoff and it will show how the ADP shareholders basis in ADP should be allocated to ADP and CDK. I would expect those fair market values to be in the $73 range for ADP and $31 range for CDK. Those two specific values would lead to 87.6% of the basis staying with ADP and 12.4% getting moved to the new CDK holding.


    The math: 73 / (73 + 31/3) = 0.876 and (31/3) / (73 + 31/3) = 0.124


    Step two will be to decide how you - the user - wants this entered. Two options from among several:


    1. Enter a Corporate Securities Spin-off transaction (Enter transactions button) from within the account holding the ADP shares. Transaction date is Sept 30, 2014. Enter the two fair market values from the Form 8937 as the respective 'cost' of the companies and enter 0.333333 for the New Shares issued field. Note that this method backdates transactions and thus may make your historical pictures inaccurate. I do not care for this method, but it is simple.
    2. Do some math ahead of time using the percentages established in the Form 8937 to determine the the proper basis for each lot of ADP and CDK that you own after the spinoff. Enter a Remove Shares transaction for all ADP shares dated 9/30/14. Enter a pair of Add Shares transactions (Add Shares of ADP and Add Shares of CDK) for each lot of ADP that you held. The ADP add will be for the same number of ADP in that lot; the CDK shares will be for 1/3 of that share quantity. The 'cost basis' for each of those Add Shares transactions will be determined using the percentages from the Form 8937. All these transactions would be dated 9/30/14.
    After whatever entry method you choose, sell the fractional shares for the cash-in-lieu amount you received.


    At such time as the data gets clearly established, I'll try to post an example or further information.
    One problem with the spin off wizard is that it creates the spun off security as of the original purchase date of the lot that it's spun off of.  Of course your total basis as of previous periods is correct if you add the two securities together, and since the new security didn't really exist "back then" its market value is $0, so your market value isn't misstated either.  It's just disconcerting and somewhat confusing when you look back at the Account's holdings for dates before the spin off.  The reason Quicken does this is that the spin off is effected by a return of capital from the old security as of the lot's purchase date and a buy as of that date.

    I haven't tried q.lurker's suggestion but I expect this "wrinkle" would still exist.

    Too, having been burned by return of capital transactions - they just seem to inevitably create problems at some point - I've finally learned to stay away from them.
  • q_lurkerq_lurker SuperUser
    edited December 2016
    q.lurker said:


    Step one is to wait for ADP to publish their 8937 for for the event. By law, they are required to do so within 45 days. For this simple of a transaction, I would expect it to be much sooner. That document will show their computation and determination of fair market values for the spinoff and it will show how the ADP shareholders basis in ADP should be allocated to ADP and CDK. I would expect those fair market values to be in the $73 range for ADP and $31 range for CDK. Those two specific values would lead to 87.6% of the basis staying with ADP and 12.4% getting moved to the new CDK holding.


    The math: 73 / (73 + 31/3) = 0.876 and (31/3) / (73 + 31/3) = 0.124


    Step two will be to decide how you - the user - wants this entered. Two options from among several:


    1. Enter a Corporate Securities Spin-off transaction (Enter transactions button) from within the account holding the ADP shares. Transaction date is Sept 30, 2014. Enter the two fair market values from the Form 8937 as the respective 'cost' of the companies and enter 0.333333 for the New Shares issued field. Note that this method backdates transactions and thus may make your historical pictures inaccurate. I do not care for this method, but it is simple.
    2. Do some math ahead of time using the percentages established in the Form 8937 to determine the the proper basis for each lot of ADP and CDK that you own after the spinoff. Enter a Remove Shares transaction for all ADP shares dated 9/30/14. Enter a pair of Add Shares transactions (Add Shares of ADP and Add Shares of CDK) for each lot of ADP that you held. The ADP add will be for the same number of ADP in that lot; the CDK shares will be for 1/3 of that share quantity. The 'cost basis' for each of those Add Shares transactions will be determined using the percentages from the Form 8937. All these transactions would be dated 9/30/14.
    After whatever entry method you choose, sell the fractional shares for the cash-in-lieu amount you received.


    At such time as the data gets clearly established, I'll try to post an example or further information.
    Tom:  I am expecting my 'wrinkle' to avoid that problem, in that the backdating and RtrnCap transactions take place in a temporary account which is deleted (including those problematic transactions) in the end.  One ends up with only the Remove Shares / Add Shares transactions.  That is not to say some lingering effects don't exist.  Somehow, they seem to for some situations.
  • edited July 2016
    q.lurker said:


    Step one is to wait for ADP to publish their 8937 for for the event. By law, they are required to do so within 45 days. For this simple of a transaction, I would expect it to be much sooner. That document will show their computation and determination of fair market values for the spinoff and it will show how the ADP shareholders basis in ADP should be allocated to ADP and CDK. I would expect those fair market values to be in the $73 range for ADP and $31 range for CDK. Those two specific values would lead to 87.6% of the basis staying with ADP and 12.4% getting moved to the new CDK holding.


    The math: 73 / (73 + 31/3) = 0.876 and (31/3) / (73 + 31/3) = 0.124


    Step two will be to decide how you - the user - wants this entered. Two options from among several:


    1. Enter a Corporate Securities Spin-off transaction (Enter transactions button) from within the account holding the ADP shares. Transaction date is Sept 30, 2014. Enter the two fair market values from the Form 8937 as the respective 'cost' of the companies and enter 0.333333 for the New Shares issued field. Note that this method backdates transactions and thus may make your historical pictures inaccurate. I do not care for this method, but it is simple.
    2. Do some math ahead of time using the percentages established in the Form 8937 to determine the the proper basis for each lot of ADP and CDK that you own after the spinoff. Enter a Remove Shares transaction for all ADP shares dated 9/30/14. Enter a pair of Add Shares transactions (Add Shares of ADP and Add Shares of CDK) for each lot of ADP that you held. The ADP add will be for the same number of ADP in that lot; the CDK shares will be for 1/3 of that share quantity. The 'cost basis' for each of those Add Shares transactions will be determined using the percentages from the Form 8937. All these transactions would be dated 9/30/14.
    After whatever entry method you choose, sell the fractional shares for the cash-in-lieu amount you received.


    At such time as the data gets clearly established, I'll try to post an example or further information.
    Got it.  The Remove and Add shares in the old Account all end up with the same date.  I hadn't thought that through.
  • CassiusCassius Member
    edited July 2016
    q.lurker said:


    Step one is to wait for ADP to publish their 8937 for for the event. By law, they are required to do so within 45 days. For this simple of a transaction, I would expect it to be much sooner. That document will show their computation and determination of fair market values for the spinoff and it will show how the ADP shareholders basis in ADP should be allocated to ADP and CDK. I would expect those fair market values to be in the $73 range for ADP and $31 range for CDK. Those two specific values would lead to 87.6% of the basis staying with ADP and 12.4% getting moved to the new CDK holding.


    The math: 73 / (73 + 31/3) = 0.876 and (31/3) / (73 + 31/3) = 0.124


    Step two will be to decide how you - the user - wants this entered. Two options from among several:


    1. Enter a Corporate Securities Spin-off transaction (Enter transactions button) from within the account holding the ADP shares. Transaction date is Sept 30, 2014. Enter the two fair market values from the Form 8937 as the respective 'cost' of the companies and enter 0.333333 for the New Shares issued field. Note that this method backdates transactions and thus may make your historical pictures inaccurate. I do not care for this method, but it is simple.
    2. Do some math ahead of time using the percentages established in the Form 8937 to determine the the proper basis for each lot of ADP and CDK that you own after the spinoff. Enter a Remove Shares transaction for all ADP shares dated 9/30/14. Enter a pair of Add Shares transactions (Add Shares of ADP and Add Shares of CDK) for each lot of ADP that you held. The ADP add will be for the same number of ADP in that lot; the CDK shares will be for 1/3 of that share quantity. The 'cost basis' for each of those Add Shares transactions will be determined using the percentages from the Form 8937. All these transactions would be dated 9/30/14.
    After whatever entry method you choose, sell the fractional shares for the cash-in-lieu amount you received.


    At such time as the data gets clearly established, I'll try to post an example or further information.
    You folks seem to know what you're doing, so I hope you can help me on this transaction.  I had used method 1 above.  I had 153 shares of ADP, and using the .333333 ratio, I ended up with 50.999949 shares of CDK.  I figured that I could just adjust that to 51, so I did an "Adjust Share Balance", putting in 51 shares on 10/1.  But now I'm still showing 50.999949 shares of CDK.  I thought maybe the first adjustment just didn't take, so did it again.  I got a message saying that there was already a placeholder at 10/01/14 (though I can't find one anywhere) and asking if I wanted to modify that transaction.  I chose "yes", but the share balance still hasn't been adjusted, and I still find no placeholders.  Any suggestions?
  • q_lurkerq_lurker SuperUser
    edited December 2016
    q.lurker said:


    Step one is to wait for ADP to publish their 8937 for for the event. By law, they are required to do so within 45 days. For this simple of a transaction, I would expect it to be much sooner. That document will show their computation and determination of fair market values for the spinoff and it will show how the ADP shareholders basis in ADP should be allocated to ADP and CDK. I would expect those fair market values to be in the $73 range for ADP and $31 range for CDK. Those two specific values would lead to 87.6% of the basis staying with ADP and 12.4% getting moved to the new CDK holding.


    The math: 73 / (73 + 31/3) = 0.876 and (31/3) / (73 + 31/3) = 0.124


    Step two will be to decide how you - the user - wants this entered. Two options from among several:


    1. Enter a Corporate Securities Spin-off transaction (Enter transactions button) from within the account holding the ADP shares. Transaction date is Sept 30, 2014. Enter the two fair market values from the Form 8937 as the respective 'cost' of the companies and enter 0.333333 for the New Shares issued field. Note that this method backdates transactions and thus may make your historical pictures inaccurate. I do not care for this method, but it is simple.
    2. Do some math ahead of time using the percentages established in the Form 8937 to determine the the proper basis for each lot of ADP and CDK that you own after the spinoff. Enter a Remove Shares transaction for all ADP shares dated 9/30/14. Enter a pair of Add Shares transactions (Add Shares of ADP and Add Shares of CDK) for each lot of ADP that you held. The ADP add will be for the same number of ADP in that lot; the CDK shares will be for 1/3 of that share quantity. The 'cost basis' for each of those Add Shares transactions will be determined using the percentages from the Form 8937. All these transactions would be dated 9/30/14.
    After whatever entry method you choose, sell the fractional shares for the cash-in-lieu amount you received.


    At such time as the data gets clearly established, I'll try to post an example or further information.
    Cassius:  You have hit upon another foible of the Method 1 - precision.  I don't use placeholders so I cannot comment on why you are not seeing the desired effect.  I will point out that under Edit  -- Preferences for Investment Transactions, there is an option to check for showing hidden transactions.  That would appear to be your unshown placeholder transaction.  Make sure you have that option set to be shown.  HTH
  • CassiusCassius Member
    edited July 2016
    q.lurker said:


    Step one is to wait for ADP to publish their 8937 for for the event. By law, they are required to do so within 45 days. For this simple of a transaction, I would expect it to be much sooner. That document will show their computation and determination of fair market values for the spinoff and it will show how the ADP shareholders basis in ADP should be allocated to ADP and CDK. I would expect those fair market values to be in the $73 range for ADP and $31 range for CDK. Those two specific values would lead to 87.6% of the basis staying with ADP and 12.4% getting moved to the new CDK holding.


    The math: 73 / (73 + 31/3) = 0.876 and (31/3) / (73 + 31/3) = 0.124


    Step two will be to decide how you - the user - wants this entered. Two options from among several:


    1. Enter a Corporate Securities Spin-off transaction (Enter transactions button) from within the account holding the ADP shares. Transaction date is Sept 30, 2014. Enter the two fair market values from the Form 8937 as the respective 'cost' of the companies and enter 0.333333 for the New Shares issued field. Note that this method backdates transactions and thus may make your historical pictures inaccurate. I do not care for this method, but it is simple.
    2. Do some math ahead of time using the percentages established in the Form 8937 to determine the the proper basis for each lot of ADP and CDK that you own after the spinoff. Enter a Remove Shares transaction for all ADP shares dated 9/30/14. Enter a pair of Add Shares transactions (Add Shares of ADP and Add Shares of CDK) for each lot of ADP that you held. The ADP add will be for the same number of ADP in that lot; the CDK shares will be for 1/3 of that share quantity. The 'cost basis' for each of those Add Shares transactions will be determined using the percentages from the Form 8937. All these transactions would be dated 9/30/14.
    After whatever entry method you choose, sell the fractional shares for the cash-in-lieu amount you received.


    At such time as the data gets clearly established, I'll try to post an example or further information.
    p.lurker, thanks.  You were right about the hidden transactions.  I changed the setting, and now the placeholder shows up.  Now, I'm just left with the question of why the share balance didn't change to 51.  I've seen other inquiries about that issue, unrelated to the ADP spin-off, so maybe it's just another update "improvement" from Intuit.  I may just have to delete all these entries and go method 2.  Been trying to avoid that, as there are a number of transactions involved, and I'll have to do some fudging to get the numbers to add up in the end.  It's too bad that you can't just do something like a 1 share of new for 3 shares of old entry for spin-offs. like you can for stock splits.
  • splashersplasher SuperUser
    edited December 2016
    q.lurker said:


    Step one is to wait for ADP to publish their 8937 for for the event. By law, they are required to do so within 45 days. For this simple of a transaction, I would expect it to be much sooner. That document will show their computation and determination of fair market values for the spinoff and it will show how the ADP shareholders basis in ADP should be allocated to ADP and CDK. I would expect those fair market values to be in the $73 range for ADP and $31 range for CDK. Those two specific values would lead to 87.6% of the basis staying with ADP and 12.4% getting moved to the new CDK holding.


    The math: 73 / (73 + 31/3) = 0.876 and (31/3) / (73 + 31/3) = 0.124


    Step two will be to decide how you - the user - wants this entered. Two options from among several:


    1. Enter a Corporate Securities Spin-off transaction (Enter transactions button) from within the account holding the ADP shares. Transaction date is Sept 30, 2014. Enter the two fair market values from the Form 8937 as the respective 'cost' of the companies and enter 0.333333 for the New Shares issued field. Note that this method backdates transactions and thus may make your historical pictures inaccurate. I do not care for this method, but it is simple.
    2. Do some math ahead of time using the percentages established in the Form 8937 to determine the the proper basis for each lot of ADP and CDK that you own after the spinoff. Enter a Remove Shares transaction for all ADP shares dated 9/30/14. Enter a pair of Add Shares transactions (Add Shares of ADP and Add Shares of CDK) for each lot of ADP that you held. The ADP add will be for the same number of ADP in that lot; the CDK shares will be for 1/3 of that share quantity. The 'cost basis' for each of those Add Shares transactions will be determined using the percentages from the Form 8937. All these transactions would be dated 9/30/14.
    After whatever entry method you choose, sell the fractional shares for the cash-in-lieu amount you received.


    At such time as the data gets clearly established, I'll try to post an example or further information.
    I'm curious why you are trying to "round" it up to 51?  In my case, the partial was sold off for cash in lieu of stock, so it seems to me you would want to end up with 50 vs 51.
    -splasher  using Q since 1996 -  QW2016, 2017 & Subscription  -  Win7/Win10
    -Questions? Check out the  Quicken Windows FAQ list

  • q_lurkerq_lurker SuperUser
    edited December 2016
    q.lurker said:


    Step one is to wait for ADP to publish their 8937 for for the event. By law, they are required to do so within 45 days. For this simple of a transaction, I would expect it to be much sooner. That document will show their computation and determination of fair market values for the spinoff and it will show how the ADP shareholders basis in ADP should be allocated to ADP and CDK. I would expect those fair market values to be in the $73 range for ADP and $31 range for CDK. Those two specific values would lead to 87.6% of the basis staying with ADP and 12.4% getting moved to the new CDK holding.


    The math: 73 / (73 + 31/3) = 0.876 and (31/3) / (73 + 31/3) = 0.124


    Step two will be to decide how you - the user - wants this entered. Two options from among several:


    1. Enter a Corporate Securities Spin-off transaction (Enter transactions button) from within the account holding the ADP shares. Transaction date is Sept 30, 2014. Enter the two fair market values from the Form 8937 as the respective 'cost' of the companies and enter 0.333333 for the New Shares issued field. Note that this method backdates transactions and thus may make your historical pictures inaccurate. I do not care for this method, but it is simple.
    2. Do some math ahead of time using the percentages established in the Form 8937 to determine the the proper basis for each lot of ADP and CDK that you own after the spinoff. Enter a Remove Shares transaction for all ADP shares dated 9/30/14. Enter a pair of Add Shares transactions (Add Shares of ADP and Add Shares of CDK) for each lot of ADP that you held. The ADP add will be for the same number of ADP in that lot; the CDK shares will be for 1/3 of that share quantity. The 'cost basis' for each of those Add Shares transactions will be determined using the percentages from the Form 8937. All these transactions would be dated 9/30/14.
    After whatever entry method you choose, sell the fractional shares for the cash-in-lieu amount you received.


    At such time as the data gets clearly established, I'll try to post an example or further information.
    Splasher:  In Cassius's case, he started with 153 shares of ADP and received 51 shares of CDK in the real world.  But for Quicken's Corporate Spinoff action, the user is constrained to enter the Shares received per share held ratio limited to 6 decimal places.  0.333333 does not equal 1/3.  Entering the 0.333333 for 153 shares yields 50.999949 instead of the proper value of 51 even.  The user is trying to make up that difference.  

    As I think further about it, and assuming the 153 shares was one lot, I might be inclined to use the ratio 0.333334, producing 51.000102 shares, and then doing a Remove Shares transaction of 0.000102 shares to bring the CDK holding back to the even 51 shares.  That would be preferable in my mind to an Added Shares transaction of 0.000051 shares which would create a second lot of the CDK holding.  

    Of course my real preference is still for the Method 2 I proposed which will keep all the holdings properly represented directly.
  • CassiusCassius Member
    edited July 2016
    q.lurker said:


    Step one is to wait for ADP to publish their 8937 for for the event. By law, they are required to do so within 45 days. For this simple of a transaction, I would expect it to be much sooner. That document will show their computation and determination of fair market values for the spinoff and it will show how the ADP shareholders basis in ADP should be allocated to ADP and CDK. I would expect those fair market values to be in the $73 range for ADP and $31 range for CDK. Those two specific values would lead to 87.6% of the basis staying with ADP and 12.4% getting moved to the new CDK holding.


    The math: 73 / (73 + 31/3) = 0.876 and (31/3) / (73 + 31/3) = 0.124


    Step two will be to decide how you - the user - wants this entered. Two options from among several:


    1. Enter a Corporate Securities Spin-off transaction (Enter transactions button) from within the account holding the ADP shares. Transaction date is Sept 30, 2014. Enter the two fair market values from the Form 8937 as the respective 'cost' of the companies and enter 0.333333 for the New Shares issued field. Note that this method backdates transactions and thus may make your historical pictures inaccurate. I do not care for this method, but it is simple.
    2. Do some math ahead of time using the percentages established in the Form 8937 to determine the the proper basis for each lot of ADP and CDK that you own after the spinoff. Enter a Remove Shares transaction for all ADP shares dated 9/30/14. Enter a pair of Add Shares transactions (Add Shares of ADP and Add Shares of CDK) for each lot of ADP that you held. The ADP add will be for the same number of ADP in that lot; the CDK shares will be for 1/3 of that share quantity. The 'cost basis' for each of those Add Shares transactions will be determined using the percentages from the Form 8937. All these transactions would be dated 9/30/14.
    After whatever entry method you choose, sell the fractional shares for the cash-in-lieu amount you received.


    At such time as the data gets clearly established, I'll try to post an example or further information.
    q.luker, thanks for answering Splasher.  Unfortunately, I have six lots with some 1 and 2 share transactions, so whatever I do will require some rounding.  I think I'll just start over, delete the prior entries, use method 2, and use share amounts that add up to 51.  Close enough for government work, as they say.
  • splashersplasher SuperUser
    edited December 2016
    q.lurker said:


    Step one is to wait for ADP to publish their 8937 for for the event. By law, they are required to do so within 45 days. For this simple of a transaction, I would expect it to be much sooner. That document will show their computation and determination of fair market values for the spinoff and it will show how the ADP shareholders basis in ADP should be allocated to ADP and CDK. I would expect those fair market values to be in the $73 range for ADP and $31 range for CDK. Those two specific values would lead to 87.6% of the basis staying with ADP and 12.4% getting moved to the new CDK holding.


    The math: 73 / (73 + 31/3) = 0.876 and (31/3) / (73 + 31/3) = 0.124


    Step two will be to decide how you - the user - wants this entered. Two options from among several:


    1. Enter a Corporate Securities Spin-off transaction (Enter transactions button) from within the account holding the ADP shares. Transaction date is Sept 30, 2014. Enter the two fair market values from the Form 8937 as the respective 'cost' of the companies and enter 0.333333 for the New Shares issued field. Note that this method backdates transactions and thus may make your historical pictures inaccurate. I do not care for this method, but it is simple.
    2. Do some math ahead of time using the percentages established in the Form 8937 to determine the the proper basis for each lot of ADP and CDK that you own after the spinoff. Enter a Remove Shares transaction for all ADP shares dated 9/30/14. Enter a pair of Add Shares transactions (Add Shares of ADP and Add Shares of CDK) for each lot of ADP that you held. The ADP add will be for the same number of ADP in that lot; the CDK shares will be for 1/3 of that share quantity. The 'cost basis' for each of those Add Shares transactions will be determined using the percentages from the Form 8937. All these transactions would be dated 9/30/14.
    After whatever entry method you choose, sell the fractional shares for the cash-in-lieu amount you received.


    At such time as the data gets clearly established, I'll try to post an example or further information.
    I understand now, I was focused on the end result and not the starting point.
    -splasher  using Q since 1996 -  QW2016, 2017 & Subscription  -  Win7/Win10
    -Questions? Check out the  Quicken Windows FAQ list

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