Honeywell International Spin-Off Of Solstice Advanced Materials - Cost Basis

Rick8
Rick8 Member ✭✭✭✭
edited November 16 in Investing (Windows)

Hello Fellow Investors,

Below are the numbers from the Honeywell Form 8937.

You can use them for the 10/30/2025 Spin-Off of Solstice Advanced Materials.

For a Schwab Account these will give you the exact cost basis reported by Charles Schwab in your portfolio!

Honeywell - Solstice Spinoff

FORM 8937

HON

SOL

TOT

Cost Basis %

94.1874%

5.8126%

100.0000%

Closing Prices

200.97

49.61

250.58

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Comments

  • Quicken Alyssa
    Quicken Alyssa Quicken Windows Subscription Moderator mod

    Hello @Rick8,

    Thank you for sharing this information. I'm sure others will find this information useful.

    Your contribution is appreciated!

    Quicken Alyssa

    Make sure to sign up for the email digest to see a round up of your top posts.

  • q_lurker
    q_lurker Quicken Windows Subscription SuperUser ✭✭✭✭✭

    @Rick8 I also appreciate you posting this information. For those interested, the Form 8937 is currently posted here.

    To be a touch nitpicky, you posted that the two prices were closing prices; actually they were volume-weighted average prices (VWAP). The closing prices on 10/30 were (per my data) $200.11 and $48.74 for HON and SOLS, respectively.

    To maintain a neutral Average Annual Return value across this type of spinoff, I prefer to use the closing price of the spinoff and a computed price for the parent in that Corporate spinoff form you included. Thus I would use the prices of SOLS = 48.74 and HON = 197.4456 (= 200.97 / 49.61 * 48.74) to get the 94.1874% and 5.8126% basis allocation ratios you cited and that Schwab used for your account.

    More generally, I would compute the price for the parent as:

    • PP = BR * PC * SR / (1 - BR) where
      • PP = Price for the Parent company
      • BR = portion of the basis retained by the Parent
      • PC = Closing price of the spunoff Child
      • SR = Share ratio = child shares received per parent share owned

    Thus, in this case:

    • PP = 0.941874 * 48.74 * 0.25 / (1 - 0.941874) = 197.4458

    Hope this helps and does not further confuse.

  • Rick8
    Rick8 Member ✭✭✭✭
    edited November 17

    q_lurker, I know all that. I just tried to make it simple so the labels matched the Quicken fields for those that did not want to get into the weeds. It is always an issue with a spin-off as each financial institution uses its own method. This is what Schwab used and the numbers work out to the penny (now extinct!). The SEC should require everyone to use the same method with the 8937 due out the day after the split. However, like the rest of the Gov't, common sense does not seem to ever prevail!😔

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