Documented Spin-off method in use - I'm still missing where the money goes??

kking18474's Avatar


03 Nov, 2017 04:53 AM

Ok, trying to follow the instructions in the KB article here -

I believe I understand the logic and the numbers for the basis calculations. The problem I'm having is that if I sell the original positions for $0, with a SellXfr, then buy the new adjusted positions with a BuyXfr where does the money to purchase the new positions come from? My linked account (source of BuyXfr) will be decremented by the original basis AGAIN. Where is the magic on the cash? And how does this avoid a capital gain transaction when we're recording a sale?

  1. 1 Posted by kking18474 on 03 Nov, 2017 05:56 AM

    kking18474's Avatar

    I can put all the whole share buys and sells into/from a dummy account. Since the original basis and the post spinoff total adjusted basis are equal, this nets $0, but then this creates capital gain transactions.

  2. 2 Posted by Tom Freeman on 03 Nov, 2017 09:45 PM

    Tom Freeman's Avatar

    The FAQ should have specified that you were sellxfer and buyxfer into a temporary contra account. That is the dummy account you mention.

    But you could just sell then buy in the investment account and accomplish the same. If you downloaded the transactions from a broker that is how they would probably download.

    Selling then buying at cost basis should leave you with zero cap gains.

    Tom Freeman
    Infinite Kind Support

  3. 3 Posted by kking18474 on 03 Nov, 2017 10:15 PM

    kking18474's Avatar

    So why does the first Sell transaction have to be at $0? If its at $0 and the subsequent buys are at the new adjusted base then these do NOT cancel each other out, whether they are in a separate category or not.
    sorry, still missing the details.

  4. 4 Posted by Tom Freeman on 03 Nov, 2017 10:24 PM

    Tom Freeman's Avatar

    I think the zero was meant as zero sum gain. Its a mistake and should say adjusted basis like the buyxfer transactions.

    I will pass this on to the the people who work on the FAQ's.

    Tom Freeman
    Infinite Kind Support

  5. System closed this discussion on 02 Feb, 2018 10:30 PM.

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