Rosenfeld fans brag about the stocks price but the fact is that the stocks I got for $22.61 on 4/17/09 still only buys the same amount of Oscar Mayer Bologna today as it did back then. It buys less gas and about the same amount of gold. I'm getting nowhere fast. The big winner is uncle Sam (and Irene Rosenfeld's pay raise) who taxes the company and the stock holder, who thinks they made a profit.
While the details have not been released, in most spin offs it is a tax free transaction. You receive shares in the spin off in addition to the shares that you presently own of Kraft. Your cost basis is divided between the two companies. The company's web site will have a formula for that after the spin off. Then you may choose to keep both, sell both or keep one and sell the other.
(thanks) OK, but what if one of the new companies gets sold, or took over, for cash? Is a stock option always included?
(politics) I'm a Romney voter. The last thing I want is to be forced to take a profit, untill Romney's capital gains policy goes into effect. If republicans want to kill class warfare and BUM-RUSH ECONOMICS they will back The Romney capital gains policy. They make a good point that Romney giving people, making under $200,000 a year, a targeted tax break is class warfare but getting the little guy in the game will help all investers and get people of all income levels looking at the same bottom line.