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TMUSR shares

The steps listed below assume you have already accounted for the Merger of T-Mobile and Sprint in April 2020. If you have not, please do that first, using use the steps at https://www.iclub.com/faq/Home/Article?id=670

If you own T-Mobile (TMUS) you saw a new security appear in your June 2020 broker statement, TMUSR. You should have received 1 TMUSR for each share of TMUS owned. This security is a tax-free rights offering. It gives you the option to redeem each right for .05 shares of TMUS at a price of $103 per full share. It is our understanding you cannot purchase fractional shares of TMUS when redeeming your rights. The rights do trade independently. The rights expire July 27, 2020 at 5 pm Eastern.

Resolution:

If you take no action regarding these rights, they will expire worthless and you will need do nothing in the accounting software. If you sold the rights, you will need to enter a spinoff of TMUSR from TMUS before entering a sale of TMUSR.

This spinoff would be a simple spinoff transaction in the accounting software. The information below is based on the information available from the information on the T-Mobile web site.

If you exercise the rights, just enter a buy transaction for the number of shares purchased at the 103 per share offering price.

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. You only need to enter this transaction if you sold your TMUSR rights offering.

  • Date: 6/26/2020
  • Select Parent Security (or Parent Company) : T Mobile (TMUS)
  • Remaining Basis Percentage: 100
  • Cash received: See your broker statement for cash-in-lieu received
  • Spinoff Security (or Symbol of New Company) : T Mobile Rights (TMUSR)
  •  Shares received : 1.0 x (# of TMUS  shares owned) (Remember to include fractional shares.)
    • For example, if you owned 100 TMUS shares, you should receive 1.0x 100 = 100 TMUSR shares.
  • Price Per Share : .26 (Closing price on 6/26/2020)

Save the transaction and the spinoff has been entered.

These instructions will give a cost basis of zero to the TMUSR shares. This was done since the rights expired in a month.