Pennant Group (PNTG) from Ensign Group (ENSG)

Ensign Group spun off Pennant Group effective October 1, 2019 in a transaction meant to be tax-free to its shareholders. Pennant Group began normal trading on the NYSE on Monday, October 2, 2019.

The cost basis allocation information is from IRS form 8937. A link to this form can be found on the Ensign Group web site at .  In their example, Ensign Group used the average of the high and low prices on October 2, 2019 to calculate the cost basis allocation.



This action is a standard spinoff transaction in the accounting software.  The information below is based on the information available from the cost basis allocation information on the Ensign Group web site.


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:

Here is the information you need to complete the spinoff.


  • Date: 10/1/2019
  • Select Parent Security (or Parent Company) : Ensign Group (ENSG)
  • Remaining Basis Percentage: 83.72
  • Cash received:  See your broker statement for cash-in-lieu received
  • Spinoff  Security (or Symbol of New Company) : Pennant Group Corp  (PNTG)
  • Shares received : 0.5 x (# of ENSG  shares owned)   (Remember to include fractional shares.)
    • For example, if you owned 100 ENSG shares, you should receive 0.5 x 100 = 50 PNTG shares.
  • Price Per Share : 15.94  (Average of high and low price on 10/2/2019)

Save the transaction and the spinoff has been entered.



The cost basis allocation is dependent on the prices used for both Ensign Group and Pennant Group 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.