Recently a company I own enganged in a corporate spin off where I recieved a preference share in a newly formed company. I'm not quite sure how this is dealt with for capital gains tax purposes would love to hear your thoughts?
Here's the details:
Prior to the spin off - I owned 53 shares of Qurate Retail Group Inc which I purchased for $9.45. Just before the spin off the shares traded at $10.94 (at close)
Immedietly after the spin off the shares fell to a price of $6.16 (at close). I still retained 53 shares but I also got 1 preference share in the newly formed company for nill consideration. The face value of the preference share recieved was $100.
Details of the spin off can be found at the Qurate website in the investor relations section. Boards will not allow me to post a link as I'm a new user.
Would appreciate any input. In addition, I understand this thread is strictly for discussion and educational purposes only. I will not take any replies as tax advice.