Fortive spun off Vontier effective October 9, 2020 in a transaction meant to be tax-free to its shareholders. Vontier began normal trading on October 9, 2020.

This action is a simple spinoff transaction in the accounting software. The tax consequences are stated in a September 1, 2020 Form 10 SEC filing which can be viewed here: https://content.edgar-online.com/ExternalLink/EDGAR/0001193125-20-236631.html?hash=cad26d9b18ad5105b6e35235186c0caa5c6f36051de46dd731fd489d1f5953e9&dest=D49928DEX102_HTM . Find the Exhibits page and click the link for exhibit 10.2 “Form of Tax Matters Agreement”. The cost basis allocation information is calculated from the average of the opening and closing prices of VNT and FTV on the effective date of the spinoff. Neither company has posted guidance on their websites on cost allocation.

NOTE:

The cost basis allocation is dependent on the prices used for both Fortive and Vontier 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.

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: 10/9/2020
• Select Parent Security (or Parent Company) : Fortive (FTV)
• Remaining Basis Percentage: 85.188
• Cash received: See your broker statement for cash-in-lieu received
• Spinoff Security (or Symbol of New Company) : Vontier (VNT)
•  Shares received : 0.4 x (# of FTV  shares owned) (Remember to include fractional shares.)
• For example, if you owned 100 FTV shares, you should receive 0.4 x 100 = 40 VNT shares.
• Price Per Share : 30.39 (Average of open and close prices on 10/9/2020)

Save the transaction and the spinoff has been entered.