Cause:

Kellogg spun off WK Kellogg effective October 2, 2023 in a transaction meant to be tax-free to K shareholders. WK Kellogg began normal trading on October 2, 2023. Kellogg shareholders received 1 share of KLG for each 4 shares of K owned. The parent company, Kellogg, then changed its name to Kellanova while keeping the ticker symbol K.

Resolution:

This action is a simple spinoff transaction in the accounting software. It is structured to be a non-taxable event for K shareholders. The cost basis allocation information is calculated from the average of the opening and closing prices of KLG and K on the October 2, 2023. This method to determine fair market value of the post spinoff companies is commonly used. An IRS Form 8937 was not available from either company when these instructions were written.

The security profile for Kellogg needs to be updated to reflect the new name.

NOTE:

The cost basis allocation is dependent on the prices used for both WK Kellogg and Kellogg 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: https://www.myiclub.com/faq/article.aspx?id=54

Here is the information you need to complete the spinoff.

• Date: 10/2/2023
• Select Parent Security (or Parent Company) : Kellogg (K)
• Remaining Basis Percentage: 94.1
• Cash received: See your broker statement for cash-in-lieu received
• Spinoff Security (or Symbol of New Company) : WK Kellogg (KLG)
• Shares received : 0.25 x (# of K shares owned) (Include fractional shares.)
  • For example, if you owned 150 K shares, you should receive 0.25 x 150 = 37.5 KLG shares.
• Price Per Share : 13.58 (Average of opening and closing KLG prices on 10/2/2023)

Save the transaction and the spinoff has been entered.

The Name Change Entry

• Go to Accounting > Securities > Change Company Name or Ticker in myICLUB.com.
• Choose the K ticker from the dropdown menu.
• Change the name associated with this ticker symbol to Kellanova.
• Click the Submit button to save the change.

-OR-

• Go to Accounting > Securities > Update Security settings
• Click the edit icon to the left of the Kellogg name.
• Change the name in the security profile to Kellanova.
• Click the Submit button to save the change.