Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (4) | Ignore Thread Prev | Next
Author: synchronicity Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121159  
Subject: Re: Pepsi / Tricon Date: 6/2/1998 1:46 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
<<I will be considering the sale of Pepsi stock in August, as I will have held it for 18 months by then. I did receive 5 shares of Tricon from the split. If I sell the Tricon shares, which I will have had less than 18 months, will I be taxed at the higher amount, or because it is split from a stock that I've had 18 months, will I be taxed at the lower rate?>>

See my post number 5373 in the "Investor's Roundtable" area, "Dow Dividend Approach/Foolish Four" Folder. It details the calculations for a similiar situation (the GM/Raytheon spinoff). If I do this right there will be a link to it below:

http://boards.fool.com/Message.asp?id=1030001001664005&sort=postdate

The short answer is that, because this was a non-taxable spin-off, the holding period for your Tricon stock will be the same as for your Pepsi stock. A portion of the cost of the Pepsi stock gets allocated to the Tricon stock.

The methodology is the same here as for GM/Raytheon, the only difference is the percentages (cost going over to Tricon is 7.5932%, and 1 new share per 10 of Pepsi.)

Hope this helps,
synchronicity
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (4) | Ignore Thread Prev | Next

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
Post of the Day:
Berkshire Hathaway

Burger King's Play Not For Taxes?
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement