jpbrody - I just went to that SEC website with the "SpinCo" filing. I cannot believe how long these things are ! No wonder there is room for all of these law babies to earn a good living.
Also, I can't believe you looked at it enough to actually find something useful buried in there.
My approach to unclear tax stuff is : if SpinCo starts trading the first day at, say, $3 a share, and no one ever explains clearly what we are supposed to put on our tax forms, then just put down the whole $3 per SpinCo share as dividend income (knowing that this is almost certainly wrong (and in the favor of the IRS, and not you)).
If you consistently do unclear tax things in this manner, you will never lose sleep worrying about being audited. You probably have some stuff in your taxes that you are doing (knowingly or unknowingly) in your favor, so things like what I am suggesting will be useful if and when your taxes are ever scrutinized.
Also, if you work out the arithmetic, I suspect one is not talking about a lot of money.
If you own 5000 shares of Qualcomm that catch the spin-off (about $250,000 worth), and it is 1 for 4, then you've got 1250 shares of SpinCo. If it is at $3 (this is a complete random guess on my part, I do not have a clue ...), then you're talking about $3750 total "dividend." If you pay roughly 1/3 of this in taxes, you're paying $1250. And, since the correct number was probably higher than $0, you've wasted something between zero and $1250.
I would assume that anyone with $250,000 worth of one stock has seen $1250 wasted many times.
(If SpinCo starts trading at $15 or $20, I agree that my "who cares" attitude becomes a little more difficult).
Can anyone who can stand to read the SEC filing guess if $3 or $20 is a better guess?
Jon. |
