Calculating the cost basis of a stock split or spinoff can be a complex task, especially when it comes to companies like Hewlett Packard. However, with the help of the Hewlett Packard Cost Basis Calculator, this process becomes much simpler and more efficient.
What is the cost basis of a stock split?
A stock split is a corporate action in which a company divides its existing shares into multiple shares. The purpose of a stock split is to increase the number of shares outstanding without changing the total value of the company. When a stock split occurs, the cost basis of the shares is adjusted to reflect the new number of shares owned.
The cost basis of a stock split is determined by dividing the original cost basis by the split ratio. For example, if you originally purchased 100 shares of Hewlett Packard at a cost of $10 per share and the company announces a 2-for-1 stock split, your new cost basis would be $5 per share.
When did HPE spin off DXC?
Hewlett Packard Enterprises (HPE) spun off DXC Technology on March 31, 201This transaction was intended to be tax-free to HPE shareholders. DXC Technology began normal trading on the NYSE on April 3, 201
Hp trademark guidelines: protecting the brand and intellectual propertyThe cost basis allocation information for the spinoff can be found on the HPE website. In their example, HPE used the average of the high and low prices on April 3, 2017, to calculate the cost basis allocation.
How to use the Hewlett Packard Cost Basis Calculator
The Hewlett Packard Cost Basis Calculator is a tool that simplifies the process of calculating the cost basis for HPE and DXC shares after the spinoff. Here are the steps to use the calculator:
- Go to the Hewlett Packard Enterprises website and find the cost basis allocation information for the spinoff.
- Access the Hewlett Packard Cost Basis Calculator.
- Enter the following information:
- Date: 3/31/2017
- Select Parent Security (or Parent Company): Hewlett Packard Enterprises (HPE)
- Remaining Basis Percentage: 71
- Cash received: Refer to your broker statement for cash-in-lieu received
- Spinoff Security (or Symbol of New Company): DXC Technology Corp (DXC)
- Shares received: Calculate the number of DXC shares received using the formula provided in the cost basis allocation information. Remember to include fractional shares.
- Price Per Share: Enter the average of the high and low prices on 4/3/201
- Save the transaction in the calculator.
By following these steps, you can easily calculate the cost basis of your HPE and DXC shares after the spinoff.
Important Considerations
It's important to note that the cost basis allocation is dependent on the prices used for both HPE and DXC in the calculations. Brokers typically use the prices provided by the companies, including the information found in IRS form 893However, if your broker does not use this guidance, there may be a discrepancy between the cost basis recorded in your accounting records and your broker's records.
This discrepancy is not a cause for concern, as it is due to the inexact nature of the tax code. Partnership tax returns have specific areas to reconcile these differences. Additionally, ICLUBcentral tax printer software can automatically fill in these adjustments using the data imported from your accounting records and the information you enter from your 109
Hewlett packard dxc spinoff: gainwell technologiesFrequently Asked Questions
What is a stock split?
A stock split is a corporate action in which a company divides its existing shares into multiple shares. The purpose of a stock split is to increase the number of shares outstanding without changing the total value of the company. Stock splits are often done to make the shares more affordable for individual investors.
How does a stock split affect the cost basis?
When a stock split occurs, the cost basis of the shares is adjusted to reflect the new number of shares owned. For example, if you originally purchased 100 shares of a company at a cost of $10 per share and the company announces a 2-for-1 stock split, your new cost basis would be $5 per share.
What is a spinoff?
A spinoff is a corporate action in which a company creates a new independent company by separating a portion of its business. The new company, known as the spinoff, operates as a separate entity from the parent company. Spinoffs are often done to unlock value for shareholders and allow each company to focus on its core business.
How do I calculate the cost basis of a spinoff?
The cost basis of a spinoff is determined by allocating the original cost basis of the parent company's shares between the parent company and the spinoff company. This allocation is based on the fair market value of each company's shares on the date of the spinoff. The Hewlett Packard Cost Basis Calculator can help you calculate the cost basis of HPE and DXC shares after the spinoff.
Hpe bladesystem: revolutionizing server technologyWhat is the importance of calculating the cost basis?
Calculating the cost basis is important for tax purposes, as it determines the amount of capital gains or losses when you sell the shares. By accurately calculating the cost basis, you can minimize your tax liability and ensure compliance with tax laws.
Can I use the Hewlett Packard Cost Basis Calculator for other stocks?
The Hewlett Packard Cost Basis Calculator is specifically designed for calculating the cost basis of HPE and DXC shares after the spinoff. However, similar calculators may be available for other stocks or you can consult with a financial advisor or use accounting software to calculate the cost basis of other stocks.
In conclusion, the Hewlett Packard Cost Basis Calculator is a valuable tool for investors who want to accurately calculate the cost basis of their HPE and DXC shares after the spinoff. By following the steps provided and entering the necessary information, you can easily determine the cost basis and ensure compliance with tax laws.