CONSOL Energy changed its name to CNX Resources and kept its ticker symbol, CNX. It then spun off a new CONSOL Energy trading under the ticker symbol CEIX. The spinoff was effective 28 November 2017 with the first trading day for CEIX being 29 November 2017. This transaction is tax-free to its shareholders. Details of the spinoff can be found on the CEIX web site at https://investors.consolenergy.com/sec-filings?o=50. Choose the form 10-12B filing of 11 July 2017.
At the time these instructions were written no IRS form 8937 was posted on the web sites of CNX or CEIX. The remaining cost basis was calculated using the average of the opening and closing prices of the companies on 29 November 2017.
This action is a simple spinoff transaction in the accounting software. Club Accounting 3 users will need to make a name change before entering the spinoff.
Name Change for Club Accounting 3 users.
Click the Securities link in the left hand column. Double click on the CONSOL Energy name.
Edit the name to CNX Resources. Keep the CNX ticker symbol. Save the changes.
Add the new CONSOL Energy.
Click the Securities link in the left hand column.
Click the Add New link. Name is CONSOL Energy. Ticker symbol is CEIX.
Save the changes.
Myiclub.com users will not need to do this step. Though the spinoff company uses the same name as the parent before the spinoff it does not use the parent’s old ticker symbol. Because the ticker symbol remains the same, myiclub will pick up the name change now associated with the ticker symbol remaining with the renamed parent company.
The Spinoff 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_spinoff
Here is the information you need to complete the spinoff.
Date: 11/28/2017
Select Parent Security (or Parent Company) : CNX Resources (CNX)
Remaining Basis Percentage: 83.04
Cash received: See your broker statement for cash-in-lieu received
Spinoff Security (or Symbol of New Company) : CONSOL Energy (CEIX)
Shares received : 0.125 x (# of CNX shares owned) (Remember to include fractional shares.)
For example, if you owned 100 CNX shares, you should receive 0.125 x 100 = 12.5 CEIX shares.
Price Per Share : 22.335 (Average of opening and closing price on 11/29/2017)
Save the transaction and the spinoff has been entered.
NOTE:
The cost basis allocation is dependent on the prices used for both CEIX and CNX in the cost basis calculations. In our experience brokers tend to use the prices found in the guidance companies post on their websites including IRS form 8937. If your broker does not use that guidance, the cost basis of the companies involved as recorded in your accounting records and in your broker’s records will not match. This is not cause for concern. This is just due to the inexact nature of the tax code in this regard. Partnership tax returns have specific areas to reconcile these usually small differences. ICLUBcentral tax printer software automatically fills in these adjustments in the normal operation of the software using the data imported from your accounting records and that you enter from your 1099.