Handling the FTC and MDLZ recent activity

[aneilljr]

On 10/2 Ameritrade said the following in the daily transaction report:

MANDATORY - NAME CHANGE (KFT)

MANDATORY - NAME CHANGE (MDLZ)

NON-TAXABLE SPIN OFF/LIQUIDATION DISTRIBUTION (KRFT)

How do I incorporate this in FM? I owned KFT to begin with. I have no idea what to do. Please help anyone.

[Mark]

Hi aneilljr,

First, change the name/symbol of your KFT investment to MDLZ. Next, record a spin-off using the spin-off wizard. The parent MDLZ spins off a new child KRFT. I believe you get one share of KRFT for every share of MDLZ you owned. The number of shares should be reported by your broker. According to documentation on the web, this is a tax-free spin-off, so choose that option when you use the spin-off wizard. You will also need to input your cost basis of these new shares. You can either get this cost basis from your broker, or determine it yourself, based on the details of the spin-off.

[aneilljr]

Mark,

I have been with you since the beginning buying every new version as hey came out. I love FM and your attention to detail and helpfulness. Mark, I am lost. I cannot do this. I must be dumber than your average subscriber but I cannot understand this. I change the name of KFT to MDLZ by editing the name and symbol. After that I am lost because I do not knows what date to put in. Even if I change the date, neither the FIFO Cost Basis or the AVG Cost Basis change. Is the new child KRAFT? My data from Ameritrade gainskeeper has many dates for sales. So confused and disappointed. Can u help?

[Mark]

Hi aneilljr,

After you've changed the name, you should have an investment MDLZ that you can view in your Portfolio Editor. Make sure you are in the Portfolio Editor window, and find this MDLZ investment. Right mouse click on it, and choose "Investment Data / Spin-off...". This brings up the Spin-off dialog. Enter the date that MDLZ spun-off KRFT (10/2 according to your Ameritrade statement I believe you said...). Yes, KRFT is the child investment, as it was spun off by the parent MDLZ. Under the "New (Child) Investment" section enter the information for KRFT, including the number of shares you received, the cost basis, and market value on the date of the spin-off. In the upper section of this dialog it is displaying your cost basis in the parent MDLZ on the date of this spin-off. This information is often useful for determining the cost basis of your spun-off child shares, as they are sometimes a percentage of the cost basis of the parent shares, before the spin-off.