Illumina spun off GRAIL effective after the close of markets on June 24, 2024 in a transaction meant to be generally tax-free to ILMN shareholders. Sale of fractional shares, if any, will be a taxable event. GRAIL began normal trading on June 25, 2024. ILMN shareholders received 1 share of GRAL for each 6 shares of ILMN owned.

Resolution:

This action is a simple spinoff transaction in the accounting software. It is structured to be a non-taxable event for ILMN shareholders according to the shareholder prospectus. ILMN shareholders received 1 share of GRAL for each 6 shares of ILMN owned. A link to IRS Form 8937 regarding this spinoff is available on the Illumina web site at https://investor.illumina.com/GRAIL-Acquisition/default.aspx. These instructions use the spinoff cost basis allocation in the example in form 8937.

NOTE:

The cost basis allocation is dependent on the prices used for both GRAIL and Illumina 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 may 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: 6/24/2024
• Select Parent Security (or Parent Company) : Illumina (ILMN)
• Remaining Basis Percentage: 97.485
• Cash received:  See your broker statement for cash-in-lieu received
• Spinoff  Security (or Symbol of New Company) : GRAIL (GRAL)
• Shares received : (# of ILMN shares owned)/6    (Include fractional shares.)
  • For example, if you owned 100 ILMN shares, you should receive 100/6= 16.667 GRAL shares.
• Price Per Share : 17.00   (Closing GRAL price on 6/25/2024 as per form 8937)                           

Save the transaction and the spinoff has been entered.