Because they were one company - the company itself split. To give the real example, I worked for Hewlett Packard (HP ... HPQ stock symbol). But HP split into HP Inc. (retained the HPQ symbol) and Hewlett Packard Enterprise (HPE stock symbol). When that split happened, HPQ retained 47.15% of the cost basis and HPE took the other 52.85%. To make matters worse, HPE then sold off parts of its business, which further splintered the 52.85% cost basis. But lets keep things more simple. I am good with cost basis, but I was unsure if the discount rate distribution follows the same rules such that HP Inc. would be the same 47.15% of the discount rate taxable amount and HPE (before its subsequent divestitures) would be the same 52.85%. I would think so, but don't want to assume! On the simple side, all stock is qualified (held at least two years after the offering (grant date) and at least one year after the exercise (purchase date)).
If I sold all the stock at the same time, maybe there wouldn't be an issue since it would all come out in the wash, but I only sold some of each and different amounts from different lots. So to correctly report, I need to know how the discount rate taxable amount is handled - is it the same or different than cost basis, and if different, what? Thanks.
