General Electric spun off GE Healthcare effective January 4, 2023 in a transaction meant to be tax-free to GE shareholders. GE Healthcare began normal trading on January 4, 2023. GE shareholders received 1 share of GEHC for each 3 shares of GE owned.

This action is a standard spinoff transaction in the accounting software. It is structured to be a non-taxable event for GE shareholders. The cost basis allocation information is calculated from the average of the opening and closing prices of GEHC and GE on the effective date of the spinoff. This method to determine fair market value of the post spinoff companies is commonly used. IRS Form 8937 was not found on the GE and GEHC websites before these instructions were written.

NOTE:

The cost basis allocation is dependent on the prices used for both GE Healthcare and General Electric 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 available our instructions will use the guidance in form 8937. If your broker does not use that guidance, or form 8937 is not publicly available, 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 in myICLUB.com. 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: 1/4/2023
• Select Parent Security (or Parent Company) : General Electric (GE)
• Remaining Basis Percentage:39
• Cash received: See your broker statement for cash-in-lieu received
• Spinoff Security (or Symbol of New Company) : GE Healthcare (GEHC)
• Shares received : 0.33334 x (# of GE shares owned) (Remember to include fractional shares.)
  • For example, if you owned 100 GE shares, you should receive 0.33334 x 100 = 33.334 GEHC shares.
• Price Per Share : 57.31  (Average of opening and closing GEHC prices on 1/4/2023)     

Save the transaction and the spinoff has been entered.