Recording a Corporate Spin-off of New Securities

About recording a securities spin-off

A corporate spin-off can require shares of the new company to be issued to those who own shares of the original company. Use the Corporate Securities Spin-off dialog to record these changes in Quicken.

If you need to find closing prices for either the original security or the new one on the date of the spin-off, you can download historical prices from the Security Detail View.

Watch for these related changes:

  • A corporate name change can cause the name of the security to change.
  • A corporate acquisition can involve stock swaps.

Instructions

  1. Open the account you want to use.
  2. Click Enter Transactions.
  3. In the Enter Transaction list, select Corporate Securities Spin-off.
  4. Use this dialog to change the security name and price information when a corporation spins off another corporation or entity.
    • Security Name – Click the Security name drop-down arrow and select the original security--the one that is doing the spin off, not the new one.
    • New Company – Enter the name of the new company.

      Note:You cannot enter a security that already exists in Quicken. Because a spin-off creates a new security, you must enter a new name for the new security. If you created the new security yourself, delete it. Let Quicken create the new security as part of the spin-off.

      Before you can delete a security, you must find and delete all transactions that use that security. However, if you only want to hide the security and prevent any future use, you do not need to delete all transactions that use it. For record keeping and tax purposes, it is best to hide a security, instead of deleting it from the file.

      1. Select the Investing menu and select Security List.
      2. Select the security to delete.
      3. Click Report to see a list of all transactions that use the selected security.
      4. On the report, click Preferences.
        1. In the left column, select Reports Only.
        2. In the right column, be sure QuickZoom to investment forms is not selected.
      5. On the report, double-click a transaction to go to the transaction list.
      6. Delete the transaction.
      7. Repeat steps 4 - 6 for all transactions involving the security.
      8. When all transactions involving the security are deleted, select the security on the Security List and click Delete.
    • New shares issued – Enter the ratio of new shares issued to old shares.

      Note: Enter the ratio, not a number of shares. For example, if you own 150 shares of the original company and the spin-off ratio is .65 new shares for each old share, you would enter .65 (the ratio), rather than 149.35 (the total number of shares you received). If you do not have the information, it should be available from the parent company or from news articles on the day of the spin-off.

    • Cost per old share – Enter the closing price per share of your original security, on the date of the spin-off.
    • Cost per new share – Enter the cost per share of the new security (the one that was spun off), on the date of the spin-off.
    • Taxable spin-off – If this is a taxable spin-off, select the check box. The parent company determines whether this is a taxable or nontaxable spin-off.
      • If this is a taxable spin-off, Quicken enters one Return of Capital transaction from the parent company and one Buy transaction for the spin-off company, recorded on the day of the spin-off.
      • If this is a nontaxable spin-off, Quicken enters a pair of transactions for each open lot of the parent company-a Return of Capital transaction from the parent company and a Buy transaction for the spin-off company, recorded with the same date as the open lot.
    • Memo – For example, "Nontaxable spin-off on (date)" or "Taxable spin-off on (date)."
  5. Click Enter/New to enter another transaction, or Enter/Done to finish.

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