Verizon spin-off


C

Caryl

The website for Verizon has a formula for "Calculating the Tax Basis
for Verizon Communications Inc. Common Stock and Idearc Inc. Common
Stock Following the Spin-off." Using the formula I was able to
calculate the tax basis cost for both stocks. I have no problem with
Idearc, as I just changed the price paid (I originally had the price
paid as 0).

However, I am not sure what to do with the new price paid for Verizon.
I have had Verizon for about nine years, through a split and a name
change. Should I go back to the original purchase screen and change the
price paid there to the new calculated price? Or is there someplace
else where the new price paid should be entered?

Thank you for your help.

Caryl
 
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E

Eric Bloch

Verizon should have a return of capital transaction entered on the date of
spin off, keeping the cash in the same Q account.

Then Idearc has a buy transaction for all of your new shares using the cash
from the return of capital.

If you received fractional shares then enter an Idearc sale for the fraction
with money you received.

The only problem Q will have is that a Cap Gain report will show the sale as
short term to the spin off date while IRS considers it a long term sale to
the purchase of the original Verizon shares.

Eric
 
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C

Caryl

Eric,

Thank you.

Caryl

Eric said:
Verizon should have a return of capital transaction entered on the date of
spin off, keeping the cash in the same Q account.

Then Idearc has a buy transaction for all of your new shares using the cash
from the return of capital.

If you received fractional shares then enter an Idearc sale for the fraction
with money you received.

The only problem Q will have is that a Cap Gain report will show the sale as
short term to the spin off date while IRS considers it a long term sale to
the purchase of the original Verizon shares.

Eric
 

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