Return of Capital (specifically a spin-off)

Bob B's Avatar

Bob B

18 Sep, 2021 04:51 PM

I think I have a workable work-around for the lack of Return of Capital for a spin-off type transaction that does not generate a capital gains and keeps the history intact.

This works when the cost basis is averaged (not for lot based).

On the date of the spin-off, create a sell tx for the original company, make the shares sold = 0 and add a FEE (I created a category for this 'spin-off' for the tx equal to the amount of the return of capital. This reduces the cost basis of the original stock without affecting history or creating a capital gains.

For the new spin-off company, create a buyXrf tx and buy the correct number of shares and transfer the full amount of the FEE above. This creates the new stock with the correct valuation and cost basis.

Reply to this discussion

Internal reply

Formatting help / Preview (switch to plain text) No formatting (switch to Markdown)

Attaching KB article:


Attached Files

You can attach files up to 10MB

If you don't have an account yet, we need to confirm you're human and not a machine trying to post spam.

Keyboard shortcuts


? Show this help
ESC Blurs the current field

Comment Form

r Focus the comment reply box
^ + ↩ Submit the comment

You can use Command ⌘ instead of Control ^ on Mac