Re: How to record spin off

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In Reply to: Re: How to record spin off posted by HCJ on March 13, 2000 at 10:59:27:

: : : Transocean (RIG) was spinned off from Schlumberger (SLB) on 12/31/99, investors of SLB received certain shares of RIG (while their SLB shares remain the same). I tried to record the spin off by adding a new investment of RIG in the profolio using a zero cost (I think this is one way to track gains for tax purposes). However, FM will not allow an investment's cost to be zero. How would you suggest to record the transaction? Thanks.

: : Hi Felix,
: : Please read this page:

: : http://www.fundmanagersoftware.com/spin.html

: : If you have any other unanswered questions on spin-offs please post
: : a follow-up.

: : Thanks,
: : Mark
: : --

: Newbie comment/question for Mark: Have just discovered the Fund Manager "world" - super! Have just wrestled with spinoffs. Your discussion omits the necessity of recording the acquisition date (for tax purposes) of the new shares as being the same as that of the parent shares. Otherwise, you'll be recording a false start date for the child shares, which can effect short- or long-term gain info if/when they're sold. Also, if you have multiple blocks of parent shares, the spinoff transaction must be done for each block separately, because of their separate basis values.

Hi HCJ,
Thanks for the comments, this makes sense. If your shares are long term,
you should be able to lump all the long term shares into a single purchase,
and date it such that they will be long term when sold.

Thanks,
Mark
--
Mark Beiley

Fund Manager for Windows 3.1x/95/98/NT

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