1099-B resulting from Distribution Spinoff - How to report in Turbotax? (seems to be Constellation Energy (CEG) spinoff from Exelon (EXC))

[njweb]

I received a 1099-B.

I imported from my brokerage firm into Turbotax.

1. Firstly Turbotax description says ".667 sh of 21037T109 CONSTELLATION ENERGY CORP COM". But my 1099-B says .667sh with $31.79 of proceeds sold on 2/7/2022, but NO cost basis and NO date acquired.

Is it 1 share or .667 (I assume since it is just the description, it does not matter if I leave it as "1sh" (instead of .667sh)?

2.

a) How do I report the cost basis?

b) And  what is the date acquired (2/1/2022 perhaps????)

in MY case (seen the below extract from my brokerage account with details that may help?)

c) In the Summary section of my statement it shows as type B or E (basis not reported to IRS). So I assume it should be reported in Turbotax as type B short term not covered?

Thanks in advance!

All transactions for this tax lot are shown below. Symbol: CEG Description: CONSTELLATION ENERGY CORP Current quantity: 28 Current cost basis: 0.00

FAQs How do I assign a sell to a specific purchase?  Learn about cost basis tracking

Recent CEG transactions

Long positions

Date Transaction Qty Cost adjust. Cumulativeshares Cumulativecost  

02/02/22	Distrib/Spin-Off 30161N101 (EXC) to 21037T109 (CEG)	28.6667	0.00	28.6667	0.00
02/07/22	CIL Exact.	-0.6667	0.00	28	0.00

[GeorgeM777 · Accepted solution]

Question 1 - Because you received a fractional share, report what you received, that is .667 share, and $31.79 in proceeds.  

Question 2 - According to Exelon's Form 8937 filing,  on February 1, 2022 (the “Distribution Date”), Exelon distributed all of the outstanding shares of common stock of Constellation Energy (CEG) on a pro rata basis to Exelon shareholders of record as of 5:00 p.m. Eastern time on January 20, 2022.  Thus, and as you suggested in your post, you might consider using February 1, 2022, as your acquired date as that was the date of the distribution.  

Regarding your basis in the fractional share of CEG, Form 8937 provides the following:

Based on these fair market values and the distribution ratio of one share of Constellation common stock per three shares of Exelon common stock held, a shareholder’s pre-Distribution tax basis should be allocated 70.36% to their Exelon common stock and 29.64% to their Constellation common stock.

In their Form 8937 filing, Exelon also provided this example of how an Exelon shareholder, such as yourself, can calculate what basis to assign to the shares of CEG.

For example, if an Exelon shareholder owned a single block of 1,000 shares of Exelon common stock with a basis of $40 per share and received 333 shares of Constellation common stock in the Distribution as well as cash for the 0.333 Constellation fractional share, 70.36% of the aggregate tax basis of $40,000, or $28,144.00, would be allocated to the 1,000 shares of Exelon common stock, resulting in a tax basis of $28.14 per share of Exelon common stock. The remaining 29.64% of the aggregate tax basis, or $11,856.00, would be allocated to the 333.333 shares of Constellation common stock. This results in a tax basis of approximately $35.57 per share, with approximately $11,844.16 allocated to the 333 shares received of Constellation common stock and approximately $11.84 allocated to the Constellation fractional share in respect of which cash is received.

Here is a link to Exelon's Form 8937 filing.

Exelon's Form 8937

[njweb]

Thanks a lot George!

One follow-up question: So can I use the $35.57 tax basis per share of CEG (Constellation Energy Group)?

So in my case, 0.667 shares CEG X $35.57 basis per share = $23.79 cost basis for my tax reporting?