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Suppose Microsoft is broken into two equal parts, Microsoft and Nanosoft. Nanosoft's claim to fame will be that its products are even worse than Microsoft's are -- but I digress. So you had x shares of MSFT before at say 60, and now you have x shares each of MSFT and NSFT, each at 30. So, as TMFExRO thinks with BCE and NT, is that a taxable event with the spun off shares as a dividend, taxable at ordinary rates?


A breakup of MSFT would no doubt be structured as a tax-free event to shareholders, resulting in the allocation of basis that we usually see with a spinoff. The only reason I think this thread's spinoff is taxable is that the company said so. These things are determined on a company-by-company basis.

Phil Marti
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