Spinoff of RXO, Inc (RXO) from XPO, Inc (XPO) - 11/01/2022

XPO, Inc spun off RXO, Inc effective November 1, 2022 in a transaction meant to be tax-free to XPO shareholders. RXO, Inc began normal trading on November 1, 2022. XPO, Inc shareholders received 1.0 shares of RXO for each share of XPO share owned.


This action is a simple spinoff transaction in the accounting software. It is structured to be a non-taxable event for XPO, Inc shareholders. The cost basis allocation information is calculated from the closing prices of RXO and XPO on the effective date of the spinoff. This fair market value of the post spinoff companies was used for IRS form 8937. Form 8937 was found on the XPO website before these instructions were written.


The cost basis allocation is dependent on the prices used for both XPO, Inc and RXO, Inc 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 Accounting > Securities > Record spinoff of securities. 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: 11/1/2022
  • Select Parent Security (or Parent Company) : XPO, Inc (XPO)
  • Remaining Basis Percentage: 63.03
  • Cash received:  See your broker statement for cash-in-lieu received
  • Spinoff  Security (or Symbol of New Company) : XPO, Inc (RXO)
  • Shares received : 1.0 x (# of XPO shares owned)   (Remember to include fractional shares.)
    • For example, if you owned 100 XPO shares, you should receive 1.0 x 100 = 100 RXO shares.
  • Price Per Share : 19.06   (Closing price on 11/1/2022)

Save the transaction and the spinoff has been entered.