The Motley Fool Discussion Boards
Financial Planning / Tax Strategies
|Subject: Re: Cost basis from a spin off||Date: 2/23/2013 11:57 AM|
|Author: 4aapl||Number: 117855 of 122643|
We used to own Pixar, which eventually was bought out by Disney. Shortly after Pixar shares were converted to Disney, Disney spun off a small company called Citadel Broadcasting, which started out being a penny stock (maybe 31 cents) and was only worth in total about $50 in our account, but then went to zero in short order.
I sold off our Disney shares this year and had my broker "sell" the worthless stock too, on the same day.
I would just allocate all the basis to Disney.
That sounds like the easiest thing to do. For completeness I'll check our records and make sure that the spinoff wasn't framed in such a way that we were taxed on the value at the time.
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