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Author: ryesgramdi Two stars, 250 posts Old School Fool Motley Fool One Everlasting Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 27  
Subject: Cost basis question Date: 4/11/2007 12:25 PM
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I bought CD at 20.50 a share. I recieved 1 for 4 of CD in H. I owned 200 shares of CD long term so I recieved 50 shares of H. I multiply 50 times 20.50 and get 1025. as my cost basis plus .25 of 7 cost of trade. When I went to the website recommended here, it was to me very complicated. Is there anything wrong with the way I am figuring this out for my taxes? I received 1500 today in my scottrade account so I guess I made a long term capital gain of 450.
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Author: intercst Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 24 of 27
Subject: Re: Cost basis question Date: 4/11/2007 8:15 PM
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ryesgramdi asks,

I bought CD at 20.50 a share. I recieved 1 for 4 of CD in H. I owned 200 shares of CD long term so I recieved 50 shares of H. I multiply 50 times 20.50 and get 1025. as my cost basis plus .25 of 7 cost of trade. When I went to the website recommended here, it was to me very complicated. Is there anything wrong with the way I am figuring this out for my taxes? I received 1500 today in my scottrade account so I guess I made a long term capital gain of 450.


Here's the relevant explanation from Cendant's web site.

http://64.233.167.104/search?q=cache:YLMBCvDV11AJ:www.cendant.com/documents/TaxInfoforSHsFINAL.pdf+cendant+cost+basis&hl=en&ct=clnk&cd=2&gl=us

Based on the closing price at which Cendant common stock, Realogy common stock and Wyndham Worldwidecommon stock traded on August 1, 2006, $2.44, $26.10 and $31.85, respectively, as reported for the New York StockExchange transactions, 16% of your pre-distribution tax basis should be allocated to your shares of Cendant commonstock; 42.5% should be allocated to your shares of Realogy common stock (including any fractional share interest); and41.5% should be allocated to your shares of Wyndham Worldwide common stock (including any fractional shareinterest)



You have $20.50 x 200 shares of the old Cendant (CD) with a cost basis of $4,100.

Realogy (H) is 42.5% of the $4,100 = $1,742.50 or $34.80 for each of your 50 shares

Wyndham (WYN) is 41.5% of the $4,100 = $1,701.50 $42.54 for each of the 40 shares.

Cendant (now named Avis/Budget with a ticker of CAR) is 16% of the $4,100 = $656 or $32.80 for each of the 20 shares of CAR.

Note that CAR had a 10 for 1 reverse split on 09/06/2006. That why you no longer have 200 shares of CAR (formerly CD).

intercst

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Author: ryesgramdi Two stars, 250 posts Old School Fool Motley Fool One Everlasting Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25 of 27
Subject: Re: Cost basis question Date: 4/11/2007 8:17 PM
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OK, I checked my cost basis for CAR and WYN and they are not figured the way I posted it. So I answer my own question that my cost basis is wrong for H. My account is with scottrade and after the buyout, it just tells me what I received and no longer lists H in gainskeeper where I found out the cost basis for my other two companies. Can anyone help with a simpler method than what CD has at their website.

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Author: ryesgramdi Two stars, 250 posts Old School Fool Motley Fool One Everlasting Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 26 of 27
Subject: Re: Cost basis question Date: 4/11/2007 8:24 PM
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Thanks for your helpful reply. I guess we were both typing at the same time. For some reason the way you did the math made it very simple and obvious but I didn't get it when I went to the site. I think you have probably helped other people like me who might look here for this information. You are very much appreciated.

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Author: intercst Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 27 of 27
Subject: Re: Cost basis question Date: 4/11/2007 8:37 PM
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ryesgramdi writes,

Thanks for your helpful reply. I guess we were both typing at the same time. For some reason the way you did the math made it very simple and obvious but I didn't get it when I went to the site. I think you have probably helped other people like me who might look here for this information. You are very much appreciated.


Your welcome.

Don't forget that your cost basis includes your brokerage commission so add that to the $4,100 before you do the arithmetic to allocate your cost basis to H, WYN, and CAR.

intercst

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