Re: Ford/Visteon Spin-off
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Posted by Mark on July 01, 2000 at 11:06:09:
In Reply to: Ford/Visteon Spin-off posted by Dennis Kowallek on July 01, 2000 at 07:25:17:
: Before proceeding, I did read http://www.fundmanagersoftware.com/spin.html, but the info supplied by Ford was in terms of "old basis"/"new basis". Here is the info...
: "On June 28, 2000, Ford Motor Company ("Ford") distributed all of the common
: stock of Visteon Corporation ("Visteon") owned by Ford to Ford Common and
: Class B shareholders of record as of the close of business on June 12, 2000.
: Unless you sold your right to receive Visteon shares before the distribution
: date, you recently received .130933 shares of Visteon for each Ford share
: you owned.
: To determine your tax basis, you will have to allocate the tax basis that
: you had in your Ford shares between your Ford shares and your Visteon shares
: based on their relative fair market values on June 28, 2000. Based upon the
: average high and low composite prices of Ford and Visteon on the New York
: Stock Exchange on June 28, 2000, 96.07% of your pre-distribution tax basis
: in your Ford shares should be allocated to your Ford shares, and the
: remaining 3.93% should be allocated to your Visteon shares (including any
: fractional share interest)."
: This is all they provided.
: How would I enter this in FM?
Here is my disclaimer: I am not a tax advisor, but it appears to
me that you would do the following:
Figure out your tax basis in Ford prior to the distribution by recording
a closing price equal to the average of the high and low for that 6/28/00, not
the closing price. Use the "Tax Basis FIFO (end)" or "Tax Basis AVG (end)"
fields in the custom report to do this. Set your ending report date to
6/28/00. Now that you know your pre-distribution basis, multiply this
by 3.93% to determine the amount of the distribution. As described on the
Spin.html page you would then record a return of capital distribution in
Ford for this amount, and a purchase of Visteon for this amount and
the appropriate number of shares (.130933 * # of Ford shares owned).
Fund Manager for Windows 3.1x/95/98/NT