Exelon spun off Constellation Energy effective February 1, 2022 in a transaction meant to be tax-free to EXC shareholders. Constellation Energy began normal trading on February 1, 2022. Exelon shareholders received one share of CEG for each 3 shares of EXC owned. (0.33333 CEG for each EXC share.)
This action is a simple spinoff transaction in the accounting software. It is structured to be a non-taxable event for Exelon shareholders. The cost basis allocation information is calculated from the average of the hi and low prices of CEG and EXC on the effective date of the spinoff. These are the prices used in IRS form 8937 posted on the EXC website. A link to form 8937 is on the EXC website. Use the Search function on the website and search for “Form 8937”.
The cost basis allocation is dependent on the prices used for both Exelon and Constellation Energy 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.
Save the transaction and the spinoff has been entered.