DowDuPont spun off Dow effective April 1, 2019 in a transaction meant to be tax-free to its shareholders. The cost basis allocation information from IRS form 8937 was not available when these instructions were written. In the cost basis allocation equation the average of the opening and closing prices on April 1, 2019 were used.
Details regarding this spinoff were found in the SEC filing, in the Investor Relations area of the DowDuPont web site.
This action is a simple spinoff transaction in the accounting software. The information below is based on the information available from the cost basis allocation information on the DowDuPont web site and a web site of historical prices for securities.
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.
Save the transaction and the spinoff has been entered.
The cost basis allocation is dependent on the prices used for both DowDuPont and Dow 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.