Recording Dupont Spinoff
Dupont E I De Nemour (DD) has just spun off Qnity Electronics Inc (Q). Has anyone here actually had to record this transaction in Quicken Classic (Windows) yet. I have tried entering the transaction using the spinoff option in the investment account in Quicken but it is not recording in a way that matches with the recorded transaction in my Schwab account.
I have recorded these type of transactions before so I am familiar with the process. I am actually just interested in someone replying that actually has this stock and has recorded the transaction.
Comments
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My experience with the Qnity spin off from Dupont - the "One Step Update" transaction download shows a "Withdraw" transaction of $0.00 from Qinty. It looks like that's for cash withdrawals, not close to what it should be.
I tried to Edit the transaction to change it to a "Corporate Securities Spin-Off." The dialogue box looks like it requires closing prices for both, "Q" just started trading today (11/03) so closing prices are not available yet. A note in the Help text says the spin-off transaction will enter a "Remove Shares" for all shares of the parent company and it will enter "Add Shares" for both the parent and spin-off. The dialogue box didn't ask for the symbol of the spin-off, just the name, so I'm not sure how it can completely enter the spin-off Add?
I have the same experience with the Solstice spin-off from Honeywell on 10/30. There's one transaction downloaded for the spin-off, it's recorded as a "Withdraw" of $0.00 against Solstice.
I don't have time now, so I'll wait until I have more time to try and understand what Quicken wants to correctly enter the spin-off transactions.
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As far as I can see this is simply a spin-off with DuPont shareholders receiving 1 share of Qnity for every two shares of DuPont, plus Cash in Lieu for any fractional shares of Qnity, so I don't see any problem with using the Corporate Securities Spin-Off action.
The general process is to use the spin-off "wizard", which will create a fractional share of Qnity if that's what you're entitled to, and then you "sell" the fractional share using the CIL as the "proceeds" of the sale.
The wrinkle in spin-offs is that you need to come up with a "fair market value" for each share of stock of DuPont and each share of Qnity you own immediately after the spin-off but there's no "cook book" process for determining these two numbers in the tax code, so the "correct" numbers to use are a bit ambiguous. The numbers used for each stock are used to calculate how your original basis in DuPont, pre-split, gets distributed between the two companies you now own.
At some point DuPont and/or Qnity will probably release a Form 8937 expressing their opinion(s) as to what those two values are, but your broker might very well use different numbers. If you're seeing basis numbers for DuPont and Qnity on your broker's site you should be able to "reverse engineer" the numbers used by the broker.
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From what I can see so far you have to add 1 share of Qnity for every 2 shares of Dupont. You create this transaction in your investment account as a buy of Qnity using the same date that the Dupont shares were purchased. Use a purchase price of $.00 for the Qnity. In Quicken you will see a $0.00 as a Cost basis for Qnity (ie. a 100% gain for whatever the current price of Qnity might be.) Dupont's current price has dropped since the spinoff and consequently it shows a loss that is around the gain of Qnity. When I do this it matches up to Schwab. I'll be checking on it in a week or so to make sure nothing changes when comparing Quicken to Schwab.
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In my opinion, a Buy of Qnity backdated to when DuPont was bought is not a good approach, especially when the basis for the Qnity gets established.
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Good or not, as of today that is exactly how Schwab handled the spinoff. After all, Schwab is the reporting agent for tax documents and how they report it to the IRS is all that matters to me. I'll keep monitoring, and if they change how it is handled I will adjust accordingly.
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This is exactly what I did and seems to work as intended…just need to wait and see what the CIL figure will actually be and "sell" the remaining half-share to record as necessary.
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I like your suggestion of how you handled the spinoff. I had the same issue in using the Corporate Securities Spinoff (which I did not like after I used it). I used your technique with $0 cost and matches now to my Schwab entry. It's a non-taxable account so it works for me. Thank you crwalejr for your helpful resolution. Cheers
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It takes a while for Schwab to do the full transaction. It could be weeks or it could be a month or more in my experience.
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On the Investor Relations website for DuPont they state: "No later than December 16, 2025, DuPont will post tax cost basis information for DuPont shares following the Electronics Separation. Please keep in mind that this information may not address all aspects that are relevant to your situation. We recommend you consult with your tax advisor to apply the information to your individual circumstances." That may explain why Schwab is in the dark.
https://www.investors.dupont.com/investors/dupont-investors/DuPont-Qnity-Tax-Related-Information/default.aspx
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So my "paper trail" will look like I bought Qnity on the same day I acquired Du Pont? That's confusing. I have DD in an IRA, so the tax ramifications are irrelevant for me, but this still seems like a confusing way to know what happened when. My broker indicates a Nov 3 spin off date even though stock charts indicate a 10/27 creation date for Qnity. Why are they different if DD created Qnity? So what acquisition date and what price do I use? Open? Close? High? Low? Thanks.
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So my "paper trail" will look like I bought Qnity on the same day I acquired Du Pont? That's confusing."
What you're seeing here is what the tax law requires. The fiction here is that Qnity always existed "inside" DuPont and, accordingly, your holding periods for Qnity began with each purchase of DuPont stock. Mechanically in Quicken the spin off will be recorded on the date you use in the spin-off "wizard" as an Added transaction with an Acquisition Date that same as your purchase of DuPont stock, so not so confusing. (If I'm remembering correctly, early versions of Quicken actually showed the spun-off "child" stock as existing all the way back to the original purchase date of the "parent" stock. Now that was confusing.)
"My broker indicates a Nov 3 spin off date even though stock charts indicate a 10/27 creation date for Qnity. "
The Qnity stock began trading on a "when issued" basis on 10/27 even though the distribution actually occurred 11/3. So, presumably, you could use either date in your own records as you were "owed" the Qnity stock when it began trading on a "when issued" basis on 10/27.
"So what acquisition date and what price do I use? Open? Close? High? Low?"
As I explained above the IRS has never published a standard "cook book" formula for spin-offs, saying only that you split the basis of your original DuPont shares based on the "fair market value" of your holding immediately after the spin-off. DuPont or Qnity (and maybe both) should issue "No later than December 16, 2025" a Form 8937 giving their opinion of "what prices to use", but that's only an opinion, not "the law." Since you own the stock in an IRA and there's no tax consequences, use use whatever prices you want.
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@Tom Young I believe @WSC was responding to the posts of @crwalejr who stated "From what I can see so far you have to add 1 share of Qnity for every 2 shares of Dupont. You create this transaction in your investment account as a buy of Qnity using the same date that the Dupont shares were purchased." (emphasis added)
As I said at the time, that is a poor approach as @WSC is describing. The Spinoff wizard will not do that and the user should not do that. It is not what the tax laws require. The tax laws do allow the spun off shares to carry forward with the acquisition dates of the parent company lots. Again, that is what the spinoff wizard does with the generated Add Shares transactions.
Dates: Per the Dupont releases, the shareholders received their Qnity shares November 1, a Saturday. The brokerage is apparently recording the change on the next business day, November 3. If it applied to me, I would use the November 1 date. Only if I were a speculative trader dealing with 'when issued' shares would I work with the October date(s).
Prices: My preference (in your case) would be to use the closing prices of November 3 for the spinoff wizard with a transaction date of November 1. I find closing price (particularly for the spinoff, Q) maintains slightly better (more accurate) Investment Performance Report and Average Annual Return values.
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Thanks for everyone's help.
Maybe this is over-simplified but for those of us with DD is in an IRA, why not just add the correct number of shares as “shares in” and note it’s a spinoff of DD? I tried the wizard and it created dozens of adjustments, one for each quarterly stock dividend I've been paid since I bought DD. It was very “messy” and I don’t really need that, do I, since it’s an IRA?
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What you've suggested here would work from the standpoint of getting the total market value of all securities in the Account properly stated, though it wouldn't allocate basis between the two stocks and would show the Qnity unrealized gain as the total value of the shares held. What you lose there is a lot of stock "metrics."
Using the Quicken spin-off wizard can create a lot of entries, but on the other hand "who cares?" A lot of entries on the date you use to record the spin-off can simply be ignored and completely skipped over when you're scrolling through the Transaction Register.
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The DuPont website promises that, "No later than December 16, 2025, DuPont will post tax cost basis information for DuPont shares following the Electronics Separation." If you can wait, that should provide the information needed for the Corporate Spinoff wizard.
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Form 8937 Report of Organizational Actions Affecting Basis of Securities is available.
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I have Quicken Classic Business & Personal (Subscription says it expired on 8/17/2025 but I know I paid it - thought it would update this date) Version R65.17 and Build 27.1.65.17 and I am on Windows 11.
I entered the 11/1/2025 Dupont De Nemours Inc (DD) Corporate Spin-off to Qnity Electronics Inc. (Q)
I have 177 shares of DD and after entering the spin-off had 88.5 shares of Q which is correct.
I used the Corporate Securities Spin-off:
Security Name: Dupont De Nemours Inc
New Company: Qnity Electronics Inc
New shares issued: .5 (Received 1 share for every 2 shares ie. 177 / 2 = 88.5 OR 177 x .5 = 88.5)
Cost per old share: 34.12 (which is the 11/3/25 average of the high & low trading prices as suggested on the Form 8937)
Cost per new share: 97.77 (which is the 11/3/25 average of the high & low trading prices as suggested on the Form 8937)
Memo: Nontaxable spin-off 11/1/2025 (I had put in more info but it defaulted to this)
Then I sold the .5 shares of Q and entered the proceeds of $49.13 that Schwab has & I received. The Cost Basis of $15.32 and Gain $33.81 matched what Schwab currently has.
However, the Cost Basis of the 177 DD shares and the Cost Basis of the 88 Q shares are off by 16 cents. Actually DD is over by 17 cents, but it has been off by 1 cent for a long time so if it could be lowered by 16 cents I'd be happy. Q is under by 16 cents. I don't know how to adjust that. Any idea?
Quicken DD has Cost Basis of $1,892.12 and Schwab has Cost Basis of $1891.95
Quicken Q has Cost Basis of $2,695.58 and Schwab has Cost Basis of 2,695.74
THUS I'd like to Increase the Cost Basis of the 88 shares of Qnity by 16 cents and Decrease the Cost Basis of the 177 shares of Dupont De Nemours by 16 cents both without affecting the 11/3 sale of the .5 shares of Qnity.
The spinoff created a Return of Capital (RtnCapX) with a Transaction date of 11/1/2025, Security Name of Dupont De Nemours Inc, Amount of 2,710.90, Market Value of 2,710.90 which of course is wrong but I'm not worried about the market value at the moment, and Memo of Non taxable spin-off on 11/1/2025.
It also created an Add - Shares Added (Added) with a Transaction date of 11/1/2025, Security Name of Qnity Electronics Inc, Number of shares of 88.5, Price Paid of 30.631638, Total Cost of 2,170.90, Date Acquired of 1/29/1988, Memo of Non taxable spin-off 11/1/2025.
In addition the spin-off also created an Inc - Income (Div, Int, etc,) (MiscIncX) with a Transaction date of 11/1/2025, Security Name of Dupont De Nemours Inc, Miscellaneous of 5,941.74, Total Proceeds of 5,941.74, Memo of Cumulative unrealized gain on spin-off shares, Category for miscellaneous - UnrlzGain.
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There is always a chance Schwab my change it but I suspect the difference may have to do with rounding.
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Do you know when Schwab updated their data? They may have used slightly different values that you did or even just differently rounded percentages than the form 8937 presented.
I gather you would like to match their values. It appears you have only one lot of DD shares. That makes the correction 'simple'.
The two aspects in play here are that Schwab may have used slightly different values that the Form 8937 and you need to be careful about comparing values before and after the sale of the fractional 0.5 share.
What was your DD basis according to Schwab before the spinoff and after the spinoff? Was your before spinoff basis in Quicken the same?
The RtrnCap amount should be the before - after difference. ($2,171.16 maybe)
The Add Shares amount should be that same difference. Simply put, basis you are taking from DD needs to be added in as the Q basis.
I would make the RtrnCap Fair market value be the closing value of the Q shares on that date (88.5 * $97.00 = $8,584.50) and then delete the MiscInc transaction.
You should then find that after the sale of the fractional 0.5 share, your Qnity basis is the same as Schwab shows.
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I think Schwab entered the spin-off/updated their data before the Form 8937 was available.
Schwab's Cost Basis of DD 177 shares before the spin-off was $4,603.01
My Quicken Cost Basis of DD 177 shares before the spin-off was $4,603.02
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I think I'm all set. Thank you. (Hopefully Schwab doesn't change anything.)
I edited the DD Return of Capital (RtnCapX) from 2,710.90 to 2,711.06
And I edited the Add - Shares Added (Added) and increased the Total Cost from 2,710.90 to 2,711.06
Now DD shows the Cost Basis on Quicken of $1,891.96 and Q shows the Cost Basis on Quicken of $2,695.74
Thus, DD is only off by 1 cent and that is fine as it was off 1 cent when I started. My sale of the .5 shares of Q matches Schwab (proceeds, cost, & gain).
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And I deleted the MiscIncX transaction
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