Calculating the "Remaining Basis Percentage" and adjusted cost basis in a spin-off
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Calculating the "Remaining Basis Percentage" and adjusted cost basis in a spin-off David wrote...
When using the spin-off worksheet in
bivio to calculate the adjusted cost basis, you are asked for the closing price
of each stock on the day after the spin-off. What is the definition of the
day after the spin-off?
The preferred method of entering a spin-off into
bivio would be to complete the spin-off transaction form with "official"
information provided by the company in question. This information
from the company would normally include the "Remaining Basis Percentage",
therefore, making a trip to the Remaining Basis Calculation Worksheet
unnecessary.
If, after a reasonable attempt to obtain
this information from the company, you were still without an "official"
remaining basis percentage, then it would be necessary to calculate the
remaining basis percentage via the Remaining Basis Calculation Worksheet.
In that case, the prices used would normally be
the closing prices as of the first full day of trading of the new stock.
In the case of WCOM and MCIT that date would be the closing price of each on
June 8, 2001.
Thanks for using bivio!
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