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Recording Spinoff transaction

Questions about updating prices or transactions in Fund Manager

Postby oscarhobson » Tue May 20, 2014 1:23 pm

I'm unsure how to record a transaction. Company A spins off company B; I think it was treated as return of capital. I receive 10 shares in company B, and $36.86 in cash in lieu of a fractional share. Nothing changes with my shares in company A. This should be some sort of distribution? I want to make sure that the $36.86 is recognized as a short term capital gain. Any help would be appreciated.

Thanks,

Oscar Hobson
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Postby Mark » Tue May 20, 2014 2:20 pm

Hi Oscar,

You'd want to use the Spin-Off Wizard to help you record this. Right mouse click on the parent investment, and choose "Investment Data / Spin-Off..." and enter in all the details. Record the shares for the full amount, including any fractional shares. After using the spin-off wizard you can go record a sell transaction for the fractional share.
Thanks,
Mark
Fund Manager - Portfolio Management Software
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Postby oscarhobson » Wed May 21, 2014 11:11 am

Mark,

I'm getting the following error when using the spin-off wizard: Tax free spinoff not supported when any lot has a negative tax basis. The data I'm putting in are
Parent company - Arcelor Mittal
Spinoff Aperam APEMY
Date: 2/01/11
Number of shares 10.925
Cost basis 356.78 (what the brokerage showed)
Market value 442.46 (based on an open price of $40.50 on first day of trading).

Should I be entering in something different for the market value, or is there something else I'm doing wrong?

Thanks,

Oscar Hobson
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Joined: Tue Dec 16, 2008 3:57 pm

Postby Mark » Wed May 21, 2014 11:17 am

Hi Oscar,

If you look at the top of the spin-off wizard in the section that describes the pre-spin off parent cost basis, are those numbers positive?
Thanks,
Mark
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Postby oscarhobson » Wed May 21, 2014 3:04 pm

Yes, it shows $6571.79, which is different than the brokerage is showing. Is there a way to show Fund Manager's cost basis per lot? I think it may have something to do with a specific (dividend) lot. And/or the way I was recording dividends, since I wasn't sure how to account for foreign tax paid. For example, the brokerage would show a dividend received of $40.79, but would take out $6.12 as foreign tax, resulting in a cost basis of $34.67. Half of the dividends I would account for the foreign tax paid in the commission field, and half of them I didn't. So I think I need to go through each dividend transaction and straighten them out before I spend any more of your time. Attached is a screen shot of the open lots report, and the spinoff wizard.

Thanks,

Oscar Hobson
Attachments
openlots.png
openlots.png (147.35 KiB) Viewed 2040 times
spinoffwizard.png
spinoffwizard.png (217.95 KiB) Viewed 2040 times
oscarhobson
 
Posts: 12
Joined: Tue Dec 16, 2008 3:57 pm

Postby Mark » Wed May 21, 2014 3:31 pm

Hi Oscar,

While you're viewing the Open Lots report, go to "Options / Report Preferences... / Open Lots" and turn on "Tax Basis". Make sure you're running the open lots report with the same accounting method as you're using in the spin-off wizard. If that doesn't help identify the problem, you can email us that investment file, and we can take a look.
Thanks,
Mark
Fund Manager - Portfolio Management Software
Mark
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