[moneydance] Stock spinoff

[Dave Hanson]

I had the same problem, and here's how I solved it. It's not just
adding shares of B--you also need to adjust the basis of A because
some of that basis shifts to B.

To be concrete, let's use A=Altria and B=Kraft :-) Assume I own 100 sh
of Altria with a basis of $8500. For each share of Altria, .692024
shares of Kraft were distributed. Using the market value of Altria and
Kraft on 4/2/07, .7616 of the former Altria basis goes to Altria, and
.2384 of former Altria basis goes to Kraft. (See
http://www.altria.com/download/pdf/Stockholder_Tax_Basis_Information.pdf).

Thus, I got 100x.692024 = 69 sh of Kraft at a basis of
69.2024x.2384x8500 = $2026.40 and my adjusted Altria basis is
100x.7616 = $6473.40.

I modeled this kind of spin off as follows:

4/2/07 SellXfr  Altria 100sh for 8500; transfer acct. Equity
4/2/07 BuyXfr Altria 100sh for 6473.40; transfer acct. Equity
4/2/07 BuyXfr Kraft 69sh for 2026.40; transfer acct. Equity.

The "Equity" account serves only as the target/source of funds in
these (and similar) transactions. The .2024 fractional share of Kraft
was paid in cash as a dividend.

This approach yields the correct basis but the wrong date; e.g., if
you sell Altria soon, it will look like a short term capital gain. I
think you can set the Tax Date field to the date of your original
purchase of Altria, but I don't seem to be able to set that field.

If you purchased the Altria shares in several transactions, it's more
complicated, and it might not matter if the $8500 is the sum of the
basis prices of those transactions.
dave h