How is stock that I own as a result of another company's spin-off accounted for when you want to sell that stock.

ie, as a result of owning MRK I received stock in OGN which I sold this year. I am not sure when I acquired (although could probably figure this out) it. But I sold it this year. Is this considered stock you purchased anyhow to you figure capital gains.

159

Level 15

Mar 12, 2022 6:35:50 PM

all the necessary info should be on the 1099-B you should get from the broker

the spinoff of OGN was a nontaxable transaction.

you need to allocate the cost of the MRK between the OGN and MRK. the broker will probably do it for you

here's what was reported to te iRS

https://www.merck.com/wp-content/uploads/sites/5/2021/06/Form-8937.pdf#:~:text=For%20example%2C%20if%20a%20Merck%20shareholder%20owned%20a,of%20%249.52%20per%20share%20of%20Merck%20common%20stock.

the method suggested would allocate 4.77% of the cost of the MRK to OGN

with the remaining 95.23% staying with MRK

the holding period for OGN is the same as the holding period for MRK because it was a non-taxable transaction

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How is stock that I own as a result of another company's spin-off accounted for when you want to sell that stock.