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How do I calculate the cost basis of a spinoff company? Is it -0-, since I did not make a purchase? Or is it the stock price at the close of the first day of trading?

And TMF ExRO answered......

You do it the way they told you to in all that paperwork that you didn't read during the spinoff. If you don't have that paperwork handy and it was a relatively recent spinoff, you'll probably find the calculations on the discussion board for either company. Type the symbol in the "Ticker" box below and click "find."

I would just add that you DON'T do it by applying the treatment in Quicken, which ends up with the holding period of the new stock starting with the spin off date and with no cost allocated to the spun off stock. I couldn't believe that this granddaddy of financial packages could have accounting for spin offs so wrong until I went the the newsgroup for Quicken.


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