Spin Off Cost Basis Calculator

How to Use the Calculator

1. Enter your original share price (the price per share of the company before the spin-off)
2. Enter the number of original shares you owned before the spin-off
3. Enter the spin-off share price (the price per share of the new company created in the spin-off)
4. Enter the number of shares you received in the spin-off
5. Click the "Calculate" button to determine your cost basis per share and total cost basis

Understanding Cost Basis in Spin-offs

A spin-off is when a company distributes shares of a subsidiary to its existing shareholders. The cost basis of your original shares is adjusted to account for the new shares received. This calculator helps you determine your new cost basis per share after the spin-off.

Example

Suppose you owned 100 shares of Company A at $50 per share, and Company A spins off a new company (Company B). You receive 20 shares of Company B at $25 per share.

Input:
Original Share Price: $50
Original Shares Owned: 100
Spin Off Share Price: $25
Spin Off Shares Received: 20

Calculation:
Cost Basis per Original Share = ($50 × 100 + $25 × 20) ÷ (100 + 20) = $5,500 ÷ 120 = $45.83

This means your new cost basis per share of Company A is $45.83, and your total cost basis for all shares (original and spin-off) is $5,500.

Important Notes

• This calculator provides an estimate of your cost basis. For tax purposes, consult a qualified accountant or tax advisor.
• If you sold any shares before the spin-off, you should adjust the number of original shares owned accordingly.
• Consider any additional costs such as brokerage fees when calculating your total cost basis.