Stock Spinoff

The following is an example of accounting for Stock Spinoff, as provided by a Moneydance customer and contributor to the support forum.

This example is accounting for spinoff of AOL from Time Warner - with the Cash in Lieu of sale from Dec 2009.

This same method should work for any stock split.

  • First, determine the original acquisition date. Then calculate the correct adjusted cost basis using published material from the issuer. This can be found by Google searching for the transaction i.e. Time Warner AOL Spin Off.

  • Create the New Security with the correct symbol.

  • Enter transactions to remove the original position. Replace it with the two new positions, reflecting the original date and the adjusted cost basis for each new position.

  • Enter the Sell for the fractional shares at the current date.

Date Action Security Shares Amount
Spinoff Date SellXfr Original Company Total Shares $0.00
Original Date BuyXfr Original Company New No. of Shares Adjusted Basis
Original Date BuyXfr New Company Shares + Fractional Adjusted Basis
Spinoff Date Sell New Company Fractional Shares Proceeds

This should leave the original acquisition dates for the two securities, and their correctly adjusted cost basis.

You should be left with with the proceeds of the fractional sale, and the correct capital gain/loss information for the fractional shares that were sold.

Thanks to support forum user, FatRaiderFan, for helping us compile this article!