Please help with determining cost basis calculation for fractional shares received from spinoff of MicroFocus from Hewlett Packard Enterprise.

[azmom12345]

I received a 1099B for $24.44 cash in lieu of fractional shares of MicroFocus from the spinoff from HPE.  This is the info from the 1099B.  1A - 0.775 shares, 1B - blank for date acquired, 1C - 9/1/17 date sold, 1D - $24.44 proceeds, 1E - blank for cost or other basis, Box 5 - non-covered securities Code X.

Would this be considered a long-term or short-term investment?  I've owned shares of the original HPE stock for many years.  I'm not sure what to put into TurboTax for the cost basis amount.  Would it be zero?  And if so, why?  Would it be based on the stock price of the HPE stock or the MicroFocus stock?  Thank you very much!

[TomYoung]

Forgetting the intermediate SeattleSpinCo stock you actually received, you'd allocate 22.22% of your original HPE basis to ALL the MicroFocus stock you acquired, including the fraction of a share.

Your basis in the fraction of the share received is:    

           ($'s allocated to ALL MicroFocus stock received)/# of shares received, including fraction)x(fraction of a share sold via CIL)

Your share of the fraction would be short term as your holding period for MicroFocus started over.

Tom Young

[azmom12345]

Thanks for the reply!  Unfortunately I'm still a little confused.  I'm not sure how to calculate the $ allocated to all MF stock.  I had 428 shares of HPE stock as of 9/1, the distribution date.  Using the ratios (1:1) Seattle Spinco and (1:0.137326) MicroFocus, resulted in 58.775 MF shares or 58 total shares and .775 fractional shares.  Is the calculation for the cost basis
((58.775 x $31.536 [price used to get $24.44 proceeds]) / 58.775) x .775 = $24.44, which is the proceeds showing in Box 1D of the 1099B?

[azmom12345]

Thanks for the reply!  Unfortunately I'm still a little confused.  I'm not sure how to calculate the $ allocated to all MF stock.  I had 428 shares of HPE stock as of 9/1, the distribution date.  Using the ratios (1:1) Seattle Spinco and (1:0.137326) MicroFocus, resulted in 58.775 MF shares or 58 total shares and .775 fractional shares.  Is the calculation for the cost basis
((58.775 x $31.536 [price used to get $24.44 proceeds]) / 58.775) x .775 = $24.44, which is the proceeds showing in Box 1D of the 1099B?

[azmom12345]

Thanks for the reply!  Unfortunately I'm still a little confused.  I'm not sure how to calculate the $ allocated to all MF stock.  I had 428 shares of HPE stock as of 9/1, the distribution date.  Using the ratios (1:1) Seattle Spinco and (1:0.13732) MicroFocus, resulted in 58.775 MF shares or 58 total shares and .775 fractional shares.  Is the calculation for the cost basis
((58.775 x $31.536 [price used to get $24.44 proceeds]) / 58.775) x .775 = $24.44, which is the proceeds showing in Box 1D of the 1099B?