Due to a separation of REITS from the financial sector ETF, State Street Global Advisors distributed a special dividend to holders of XLF in the form of shares of its Real Estate ETF, XLRE. The value of the distribution was estimated at $4.44356 per XLF share. This distribution is considered a combination of return of capital and ordinary income. The estimated portion of each is 74% return of capital and 26% ordinary income. This is an estimate from State Street Advisors. The final number may be different and will be reported on your 1099 in early 2017. You may need to make adjustments to your entries after receiving the 1099. State Street has given no guidance on the holding period of the XLRE shares. In general, if you may realize income/gain from a stock dividend then the new shares start their holding period on the day of distribution. These instructions adhere to these general guidelines.

All owners of XLF should first determine the amount of each type of distribution.

The cash value of the distribution is $4.44356 per XLF share. Multiple your total XLF shares by this value.

Total value of distribution =  4.44356 x (# of XLF shares owned)

            If you owned 1000 shares of XLF this would be 4443.56

Amount of Return of capital = Total value x .74

            For our 1000 share example this would be 4443.56 x .74 = 3288.23

Amount of Ordinary Income = Total value x .26

For our 1000 share example this would be 4443.56 x .26 = 1155.33

The Distribution Entry

Go to Accounting > Securities > Cash Distribution

Click the linkADD ANOTHER DISTRIBUTION TYPE TO THIS TRANSACTION

Here is the information you need to complete the distribution entry.

• Date: 9/22/2016
• Symbol :  XLF
• Ex-Dividend date:  9/19/16 (Enter is field is available.)
• Type : Return of capital
• Amount: [4.44356 x  (# of XLF shares owned)  x .74 (See above instructions)
• Type : Short-term capital gain
• Amount: [4.44356 x  (# of XLF shares owned)  x .26 (See above instructions)

The Buy Entry

Go to Accounting > Securities > Buy

Here is the information you need to complete the buy.

• Date: 9/22/2016
• Select Security :  Real Estate Select Sector SPDR Fund (XLRE)
• Number of Shares Bought :  .139146 x (# of XLF shares owned). You may want to round this number to match your broker records.
• Net Total of Purchase: This should match the total value amount calculated above.
  • (4.44536 x [# of XLF shares owned])  Round this to nearest penny.

Save the buy transaction and you have completed the entries needed to record this special dividend

Important Reminder:

The information from State Street regarding this special dividend specifically states that the proportion of the dividend allocated to return of capital and ordinary income may change. You may need to adjust the distributions after receiving the 1099 in early 2017.