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This is a revised post! Incorrect calculations were given for the DPH cost basis. Thank you synchronicity (post #4117) for catching my error. Correction is in italics. Sorry for any confusion!


As promised, here is how to calculate the cost basis adjustment for the GM-DPH spin-off. First, let me point you to the Foolish Four report by Ann Coleman that discusses this adjustment:

http://www.fool.com/ddow/1999/ddow990601.htm

This column discusses how the percentages were calculated. If you have more than one purchase, you will need to do the following steps for each lot.

Calculating the Cost Basis Adjustment of GM

1. Determine the original cost basis for GM. To do this, multiply your purchase price times number of shares plus commission divided by number of shares:

[(purchase price * number of shares) + commission] / number of shares = original cost basis per share

2. Take your cost basis per share and multiply by 0.834175

3. The resulting number is your adjusted cost basis for GM

Calculating the Cost Basis Adjustment of DPH

1. Use the GM original cost basis as calculated above.

2. Take your cost basis per share and multiply by 0.165826

3. Divide that number by .69893 (1 share pre-split GM=1 share post-split GM + .69893 share DPH)

4. The resulting number is your adjusted cost basis for DPH

Adjusting My Portfolio if you have NOT already added DPH shares

1. Buy DPH using the following criteria:
A) date of purchase = date of purchase of GM
B) number of shares = (GM shares * .69893, rounded down to whole share amount – see below)
C) cost = adjusted DPH cost basis found above
D) commission = 0.00 (included with the cost basis on a per share basis)

2. Disregard any fractional shares of DPH -- you will be receiving a cash dividend for fractional shares. If you are using cash tracking, you can get the amount to add from your broker.

3. Edit GM cost basis to the following criteria:
A) date of purchase = does not change
B) number of shares = does not change
C) cost = adjusted GM cost basis found above
D) commission = 0.00 (You would remove any commission charge because it is included with the cost number.)

Adjusting My Portfolio if you have already added DPH shares

1. Edit GM cost basis to the following criteria:
A) date of purchase = does not change
B) number of shares = does not change
C) cost = adjusted GM cost basis found above
D) commission = 0.00 (You would remove any commission charge because it is included with the cost number.)

2. Edit DPH cost basis to the following criteria:
A) date of purchase = does not change
B) number of shares = does not change
C) cost = adjusted DPH cost basis found above
D) commission = 0.00 (included with the cost basis on a per share basis)


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