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Non-Tech : SPIN-OFFS "secret hiding places of stock market profits" -- Ignore unavailable to you. Want to Upgrade?

To: LKO who wrote (285)	1/5/1999 3:00:00 PM
From: marketmover	Respond to of 1185

The company generally announces what basis stockholders should use.

To: LKO who wrote (285)	1/5/1999 3:17:00 PM
From: Stewart Whitman	Read Replies (1) \| Respond to of 1185

LKO, I believe the percentages are based on the closing price on the distribution date of the spin-off. So if A closes at 2 and B closes at 1, then "cost of A = cost of X * 2/3" and "cost of B = cost of X * 1/3". This is what I've always seen, but, I'm not completely sure about the rules. More generally though... In my experience, the parent company sends you a letter or puts out a press release letting you know what percentage of your initial cost should be allocated to A and B and the distribution ratio. For Example: corporate-ir.net If you don't get such a letter/PR, then you should call the parent company's IR and get the percentages and ratios. In addition, you're supposed to treat any cash received in lieu of fractional stock as if you had sold that fractional stock on the distribution date. Note that you also need to include a signed indication of the distribution in your U.S. Federal income tax. Again, the company normally provides a form that you can use. N.B.: I'm not a tax expert. Regards, Stew