Re: Ford/Visteon Spin-off
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Posted by Dennis Kowallek on July 01, 2000 at 18:19:36:
In Reply to: Re: Ford/Visteon Spin-off posted by Mark on July 01, 2000 at 11:06:09:
: 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).
Now I'm really confused.
Isn't my pre-distribution tax basis the same as what I paid the Ford
stock? For example if I bought 100 shares at $30/share with
a commision of $50, my pre-distribution tax basis is $3050 ... correct?
After the spin-off, I'll have 13.0933 shares of Visteon. Shouldn't the basis
for these shares be $3050 * 3.93% or $119.865? Isn't this also the amount I
should enter as a "return of capital" for the Ford stock?
Does this make any sense?