Anyone with official data from OKE and OGS on what is the new cost basis for each share of these stocks after split off at
end of January?
late this week. or early next week, oneok website will have all information regarding new basis point.
click on investor link.
The adjusted cost basis for both OGS and OKE can be determined based on either the average of the lowest and highest prices of OGS and OKE or the closing prices of each on the trading day after the spinoff distribution. Either method is acceptable to use. Since the spinoff was made 2/3/14, you would use the stock prices on 2/4/14. For this illustration, I will use closing prices and make the assumption that OGS closes on 2/4/14 at $33.15 and OKE closes at $58.80. Since the spinoff distribution is 0.25 shares of OGS for every 1 share of OKE, the cost basis allocable to OGS would be ($33.15 * 0.25)/($33.15 * 0.25 +$58.80) = .1235 or 12.35%. And the cost basis allocable to OKE would be 1-.1235 = .8764 or 87.64%. The cost basis for both OGS and OKE will eventually be published on the corporate website.
Good assistance although I used the opening market value for both stocks on Monday. I may have to adjust the values in the future, but this gives me a start. Thanks again for your instructions, it is rare to find helpful information on a message board.
There always seems to be a great deal of confusion using Quicken in doing spin-offs. I think part of the reason is that Quicken is somewhat ambiguous in explaining what goes in the boxes. Here is the procedure I used. You could use an average cost for the day but I thinks that’s over kill. If Oneok does come out with a summary of the amounts then you can always adjust your figures if you so wish, but I feel this should work out just fine.
Corporate Securities Spin off
On 020314 Oneok (OKE) did a corporate spin off of One Gas, Inc (OGS).
OKE is giving me 1 share of OGS for 4 every shares of OKE that I own. I have 100 and will get an additional 25 shares of the new company.
Here is how I did it in using Quicken.
On Friday closing 1/31/14 I had 100 shares of OKE with a price of $68.49 per share and a market value of $6,849 on the 100 shares. It had a cost basis (CB) of $4,486.50
Using Quicken in the ledger, in the enter transaction drop down, I chose:
Corporate Securities Spin-off
The date of the spin-off was 021314
Security name: The existing security, Oneok, Inc
New Company: One Gas, Inc.
New shares issued: This is the ratio of old to new, since its 1 to 4 the ratio is 0.25
Cost per old share: The is the opening *FMV on the day of the spin off of OKE $58.62
Cost per new share: This is the opening FMV on the day of the spin off of OGS $33.27
This is a tax free spin off, so the taxable box is not checked.
Since I have 5 lots of OKE, quicken does 10 transactions 5 for OKE and 5 for OGC. That is the return of capital. After it is done, when I add the cost basis of OKE, and OGC, it totals ups to $4,486.50 which was the original amount. The FMV totals are slightly diffident because the price changes at the open, but are close to the original value. I now have 100 shares of OKE, and an additional 25 shares of OGC.
*FMV fair market value
I have a note of $1.12 as starting dividend. I could be off.
PS The BEST way to get info is to sign up for IR press releases via E-mail. Got to IR on OKE's site.
No one can tell your tax basis split yet. Your tax basis will be allocated between the 2 groups of stock based on the average trading price on the day of the first day of trading. For tax purposes, the average price is just the average of the high and low, no volume weighted nonsense. Assume that on Monday (I assume the first day of trading on an actual basis), OKE trades at $ 30 and OGS trades at $ 60, both the average of the high and low. Your 300 OKE shares would be worth $ 9,000 (300 shares), and your OGS shares would be worth $ 4,500 (75 shares). So 2/3 of your tax basis would be allocated to your continuing OKE shares, and 1/3 would be allocated to your OGS shares. It gets confusing if you have purchased multiple lots of OKE on different dates and different prices. But in my simple example, each lot of OKE you own would get its tax basis allocated 2/3 to OKE and 1/3 to the related OGS shares.
You don't allocate zero to the spin shares because that would allow you to artificially maintain a high basis in the OKE shares and an artificially low basis in the OGS shares, which would result in all sorts of problems depending on which shares you eventually sell. And you don't allocate based on the number of shares owned because that's purely artificial. For tax purposes, the only thing that matters is value.
But as others have posted, shortly after the first day of trading, OKE will come out with a news release and probably a calculator on its web site to determine the split for each situation.
Now that I have answered your question, can anyone tell me this: in OGS' Form 10, they do not disclose their expected starting dividend rate. They just say they expect to distribute 55% - 60% of their income. Has anyone seen any projection of the starting dividend rates for OKE and OGS? Thanks.
Your Oneoke cost basis will be reduced by 25 % .
The 25% that is reduced from Oneok , is now your new cost basis of ONEGAS.
keep it simple.
From my experience when this happens, your OKE basis is spread out to the new formed company with a predetermined ratio.
As an example. when MO spun out KRFT, PM, and last year KRFT spun off MDLZ your cost is spread out to each new share (company) based on guidelines provided and spread out from your original cost. In this case the purchase of MO.
Works in reverse too. When DIS purchased Pixar, it was an exchange of your Pixar shares for new DIS shares. Your basis in DIS was still the original cost of Pixar shares.
OKE has been so transparent of late, we will get the necessary info in due course. GL
Since you're getting 1 shr OGS for every 4 shr of OKE wouldn't the new basis be allocated 80% to OKE and 20% OGS? In other words if you bot OKE at 50 a few years ago the revised bais is now 40 for OKE and 10 for OGS.
Don't think so, your original basis will be split across the two entities.
There should be guidance coming about what ratio to use.
Everything I have read is that the shares we get from OKE, to purchase the shares in OGS will be ZERO. This will all happen this Friday (31st).
If I own 300 shares of OKE, I will also own 75 shares of OGS. For the purposes of reporting capital gains/losses when I sell these shares, what is the basis of the 75 shares of OGS? I'm thinking the basis of the 300 shares of OKE remains the same, and the basis of the 75 shares of OGS is $0. Is this correct?