Hilton World Wide split the company into Hilton World Wide and two other companies, Park Hotels & Resorts (PK) and Hilton Grand Vacations (HGV). Hilton World Wide is considered the parent company. The parent company had a reverse split immediately after the spinoffs. The cost basis allocation information on IRS form 8937 can be found on the Hilton World Wide web site at:

https://ir.hilton.com/~/media/Files/H/Hilton-Worldwide-IR-V3/documents/form-8937-2-spin-off.pdf .

 

This action will need multiple entries in the accounting software.  The information below is based on the information available from Hilton World Wide in the document referenced above. Two spinoff entries will be needed to record this transaction and a reverse split for HLT.

 

The Spinoff Entries

Go to Transactions > Spinoff  or Accounting > Securities > Record spinoff of securities depending on the version of the software being used. If you are unfamiliar with spinoff transactions you can get help at this URL: https://www.iclub.com/support/kb/default.asp?page=normal_spinoff

Here is the information you need to complete the first spinoff.

 

Date: 1/3/2017

Select Parent Security (or Parent Company) Hilton World Wide (HLT)

Remaining Basis Percentage: 90.735

Cash received:  See your broker statement for cash-in-lieu received

Spinoff  Security (or Symbol of New Company) : Hilton Grand vacations  (HGV)

Shares received :  .1 x (#of HLT shares owned)   (Remember to include fractional shares.)

For example, if you owned 100 HLT shares, you should receive .1 x 100 = 10 HGV shares.

Price Per Share : 25.85 (Closing price on 1/4/17, first trading day)

Save the transaction and this spinoff has been entered.

 

Here is the information you need to complete the second spinoff.

Date: 1/4/17

Select Parent Security (or Parent Company) Hilton World Wide (HLT)

Remaining Basis Percentage: 76.377

Cash received:  See your broker statement for cash-in-lieu received

Spinoff  Security (or Symbol of New Company) : Park Hotels & Resorts (PK)

Shares received : .2  x (#of HLT shares owned)   (Remember to include fractional shares.)

For example, if you owned 100 HLT shares, you should receive .2 x 100 = 20 PK shares.

Price Per Share : 29.90  (Closing price on 1/4/17, first trading day)

Save the transaction and this spinoff has been entered.

After all spinoff transactions have been entered the original cost basis for HLT should be apportioned in the following ratios:

HLT – 69.300%

PK    – 21.435%

HGV –  9.265%. 

 

The Reverse Split Entry

Go to Transactions > Spinoff  or Accounting > Securities > Record spinoff of securities depending on the version of the software being used. If you are unfamiliar with spinoff transactions you can get help at this URL: https://www.iclub.com/support/kb/default.asp?page=normal_split

Here is the information you need to complete the reverse split. Enter this transaction after the spinoff transactions. Enter the stock split after the spinoffs.

Date: 1/4/17

Security : Hilton World Wide (HLT)

Split Ratio :   1 for 3

Cash for Fractional Share :  See  your broker statement. Do not confuse the amount with the cash received for fractional shares in the spinoffs described above.

Save the transaction and the reverse split has been entered.