Fortune Brands spun off MasterBrand effective December 14, 2022 in a transaction meant to be tax-free to FBHS shareholders. MasterBrand began normal trading on December 14, 2022. Fortune Brands shareholders received 1.0 shares of MBC for each share of FBHS owned.

The spinoff is a simple spinoff transaction in the accounting software. It is structured to be a non-taxable event for Fortune Brands shareholders. The cost basis allocation information is calculated from the average of the opening and closing prices of MBC and FBIN on the effective date of the spinoff. Form 8937 was not found on the FBIN website before these instructions were written. The name change is best accomplished using a merger transaction in myICLUB due to the ticker symbol change. This ensures no ticker confusion with past valuations. This method has a drawback in that return calculations for Fortune Brands Innovation (FBIN) will start with the merger date (name change date), not with the original purchase date.

NOTE:

The cost basis allocation is dependent on the prices used for both Fortune Brands Innovation and MasterBrand 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: 12/14/2022
• Select Parent Security (or Parent Company) : Fortune Brands (FBHS)
• Remaining Basis Percentage: 87.39
• Cash received:  See your broker statement for cash-in-lieu received
• Spinoff Security (or Symbol of New Company) Masterbrand (MBC)
• Shares received : 1.0 x (# of FBHS shares owned)   (Remember to include fractional shares.)
  • For example, if you owned 100 FBHS shares, you should receive 1.0 x 100 = 100 MBC shares.
• Price Per Share : 9.015   (Average of opening and closing prices on 12/14/2022)                        

Save the transaction and the spinoff has been entered.

The Merger Entry

Go to Accounting > Securities > Record merger of securities. 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 Fortune Brands Home and Security (FBHS) shareholders to complete the merger to change the name to Fortune Brands Innovation (FBIN).

• Date:12/15/2022
• Old Security or Merging Company: Fortune Brands Home and Security (FBHS)
• Price per share of old Security / :  Use last FBHS valuation, if needed
• Cash received:  Do not enter anything here
• New Security: Fortune Brands Innovation (FBIN).
• New Security Price: 62.475   (Average of opening and closing price of FBIN name change date)
• Shares received : 1.0 x (# of FBHS shares owned).
  • (Remember to include fractional shares.)
• For example, if you owned 100 FBHS shares, you should receive 1.0 x 100 = 100 FBIN shares.

Save the transaction and the name and ticker symbol change has been entered.