Spin-off Dialog

This dialog is available from the Edit / Spin-off... menu command under the Graphs window. It is also available at Edit / Investment Data / Spin-off... in the Portfolio Editor window, or by right clicking on any investment and choosing the Investment Data / Spin-off... popup menu command.

Use this dialog to record a spin-off in the specified (parent) investment. This dialog supports recording either a taxable or tax-free spin-off. The following fields are available:

Date	The date of the spin-off. As the date is updated, the cost basis information for the parent investment is updated.
Pre Spin-off Parent Info	Shows information on the parent investment (the investment spinning off a child). The cost basis and number of shares owned are shown for the specified date. All this information is reported before the effects of the spin-off. This information can be used to help figure out the number of shares and cost basis for the spun-off child investment.
New (Child) Investment
Name	The name for the newly spun-off child investment.
Symbol	The symbol for the newly spun-off child investment.
Shares Received	The number of shares received as a result of the spin-off.
Cost Basis	The tax cost basis of the received shares.
Market Value	The market value of the received shares.
Taxable Status	Choose between a taxable or tax-free spin-off: Taxable: Fund Manager will create a new child investment with a Transfer In for the shares received on the date of the spin-off. Tax-Free: Fund Manager will create a new child investment, and record one or more Transfer In transactions in the child. The accounting method determines which shares are still owned as of the spin-off date. There will be one transfer in transaction for each open lot in the parent. Each transfer in transaction occurs on the spin-off date, but maintains the tax basis date from each open lot's original purchase date in the parent.
Accounting Method	Choose the accounting method to use. Determines which shares in the parent investment are owned as of the spin-off date.
Parent Cost Allocation Method	The spin-off moves some tax cost basis from the parent to the new child investment, thus reducing the paren't's cost basis. When the parent owns multiple lots on the spin-off date this option controls how to subtract the child's cost basis from these open lots. Scale by Cost (Recommended): The transferred cost basis is allocated proportionally to the original cost basis in the parent's lots. This is the most common method used for lowering the parent's cost basis. This is accomplished by recording a Transfer Out and a Transfer In (with a lowered basis) for each open lot. If there is only one open lot, a single Return of Capital distribution is used instead. Scale by Shares: The transferred cost basis is allocated proportionally to the number of shares in the parent's lots. Each share is reduced in cost by the same amount. This is accomplished by recording a single Return of Capital distribution for the amount of basis transferred to the child. Comments: Usually the "Scale by Cost" method should be used for maintaining accurate cost basis data. However, this method requires more transactions be recorded (a transfer out plus a transfer in for each open lot), thus in cases where tax cost basis isn't important you may prefer to use the "Scale by Shares" method instead, as this only requires a single Return of Capital distribution.

In addition to the transactions recorded in the parent for lowering the cost basis, an "Other" distribution is also recorded in the parent. The transferred cost basis, plus the value of the "Other" distribution add up to the market vale of the spun-off shares.

In cases where the spin-off results in fractional shares that are sold, record the spin-off with the full (with fractional) share quantity, and then also record a separate sell transaction for the fractional shares.

The new child investment will be saved to the same folder as the parent investment.

See Also