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sales treatment for shares received in an Agilent spinoff on ESPP shares

In 2014,Agilent Technologies completed the spinoff of Keysight Technologies and for all shares owned distributed 1 shares of Keysight for every 2 shares of Agilent. This was done for all shares owned which included my ESPP shares.  In 2021 I sold some of the Keysight ESPP shares and the 1099B identified the shares  as acquired through the employers stock purchase plan. I still own all corresponding  the Agilent ESPP shares.  How do I record the sale?  This was a qualifying disposition but do I have to treat these additional shares as ESPP shares?  How would I allocate to determine the compensation income?

 

Thanks,

LM

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5 Replies

sales treatment for shares received in an Agilent spinoff on ESPP shares

Agilent Technologies (A) spinoff of Keysight (KEYS) was tax-free, meaning the cost of your old Agilent shares should be split between your post-divesture Agilent shares and new Keysight shares.

 

That is, if the total cost of your old Agilent shares was $100 then the combined cost of your Agilent and Keysight shares should be $100, for example, your Agilent could basis might be reduced to $67 and your Keysight shares would be worth $33.

 

Aglient says:
For US federal income tax purposes, your aggregate basis of the common shares that you hold in Agilent and the new Keysight common stock received in the distribution (including any fractional share interest in Keysight common stock for which cash is received) will equal the aggregate basis in the Agilent common shares held by you immediately before the distribution, allocated between your Agilent common shares and the Keysight common stock (including any fractional share interest in Keysight common stock for which cash is received) you receive in the distribution in proportion to the relative fair market value of each on the distribution date.

 

Consult the Keysight Distribution Tax Basis Letter

sales treatment for shares received in an Agilent spinoff on ESPP shares

Thank you for the response.   I have allocated the basis but when entering the ESPP grant price, exercise price and discounted exercise price, etc.,  on the sale it doesn't give me the correct basis.  Do you see what I'm saying.

 

thank you,

LM

sales treatment for shares received in an Agilent spinoff on ESPP shares

Simply skip the ESPP entry ... enter it as a reg stock sale since you know the cost basis.

sales treatment for shares received in an Agilent spinoff on ESPP shares

Hi :

I agree but the 1099B identifies the stock as ESPP sale.

 

Thanks, 

LM

sales treatment for shares received in an Agilent spinoff on ESPP shares

To the IRS it is the same thing ... skip the ESPP section of the program since TT doesn't handle spin offs correctly as you can see.  

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