Spinoff of Sylvamo (SLVM) from International Paper (IP)

International Paper spun off Sylvamo effective October 1, 2021 in a transaction meant to be tax-free to IP shareholders. Sylvamo began normal trading on October 1, 2021.
International Paper shareholders received 0.0909091 shares of SLVM for each share of IP owned. (One SLVM for each 11 IP).

This action is a simple spinoff transaction in the accounting software. It is structured to be a nontaxable event for International Paper shareholders. The cost basis allocation information is
calculated from the closing prices of SLVM and IP on the effective date of the spinoff. These are the prices used in IRS form 8937 posted on the IP website. A link to form 8937 is on the IP
website at https://www.internationalpaper.com/performance/stock-information/spin-off-sylvamo. Choose the Report of Organizational Actions … link on this page.

The cost basis allocation is dependent on the prices used for both International Paper and Sylvamo 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:

Here is the information you need to complete the spinoff.

  • Date: 10/1/2021
  • Select Parent Security (or Parent Company) : International Paper(IP)
  • Remaining Basis Percentage: 94.668
  • Cash received: See your broker statement for cash-in-lieu received
  • Spinoff Security (or Symbol of New Company) : Sylvamo (SLVM)
  • Shares received : 0.0909091 x (# of IP shares owned) (Remember to include fractional
    • For example, if you owned 100 IP shares, you should receive 0.0909091 x 100 = 9.09091 SLVM shares.
  • Price Per Share : 33.00 (Closing price on 10/1/2021)

Save the transaction and the spinoff has been entered.