Spinoff of Victoria’s Secret (VSCO) from L Brands (LB) and the name & ticker symbol change of L Brands to Bath and Body Works (BBWI)

L Brands spun off Victoria’s Secret effective after the close of markets on August 2, 2021 in a transaction meant to be tax-free to LB shareholders. Victoria’s Secret began normal trading on August 3, 2021. L Brands shareholders received 0.3333 shares of VSCO for each share of LB owned.



This action is a simple spinoff transaction in the accounting software. It is structured to be a non-taxable event for L Brands shareholders. The cost basis allocation information is calculated from the opening price of VSCO and LB on the day after the effective date of the spinoff. These are the prices used in IRS form 8937 posted on the LB website. These prices were $64.50 for BBWI and $48.00 for VSCO. A link to form 8937 is on the LB website at https://www.bbwinc.com/search?query=8937 . Choose the Form 8937 link on this page.

To ensure past price retention in valuations for LB, the name change is best entered as a merger of LB into BBWI.


The cost basis allocation is dependent on the prices used for both L Brands/Bath and Body Works and Victoria’s Secret in the cost basis allocation 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: http://www.iclub.com/support/kb/default.asp?page=normal_spinoff

Here is the information you need to complete the spinoff.

  • Date: 8/2/2021
  • Select Parent Security (or Parent Company) : L Brands(LB)
  • Remaining Basis Percentage: 80.12
  • Cash received:  See your broker statement for cash-in-lieu received
  • Spinoff  Security (or Symbol of New Company) : Victoria’s Secret (VSCO)
  •  Shares received : 0.33333 x (# of LB  shares owned)   (Remember to include fractional shares.)
    • For example, if you owned 100 LB shares, you should receive 0.33333 x 100 = 33.333 VSCO shares.
  • Price Per Share : 48.00   (Opening price on 8/3/2021)  

Save the transaction and the spinoff has been entered.


The Merger Entry (for the name and ticker change)

Go to Transactions > Merger or Accounting > Securities > Record merger of securities depending on the version of the software being used. If you are unfamiliar with merger transactions you can get help at this URL: http://www.iclub.com/support/kb/default.asp?page=normal_merger

Here is the information needed for L Brands shareholders to complete the merger/name change.

  • Date: 8/3/2021
  • Old Security or Merging Company: L Brands (LB)
  • Price per share of old Security / :  Use last LB valuation, if needed
  • Cash received:  leave blank
  • New Security: Bath and Body Works (BBWI)
  • New Security Price: 64.50   (Opening price on 8/3/2021)
  • Shares received : 1.0 x (# of LB shares owned). For example, if you owned 100 LB shares, you should receive 1.0 x 100 = 100 BBWI shares..
    • (Remember to include fractional shares.)

Save the transaction and the merger has been entered.