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Spin-Off Cost Basis Calculator

Formula

The formula to calculate the Spin-Off Cost Basis (SOCB) is:

$SOCB = PSV \times OSV$

Where:

$SOCB$ is the Spin-Off Cost Basis ($)
$PSV$ is the proportion of the spin-off stock's value
$OSV$ is the cost basis of the original stock

What is Spin-Off Cost Basis?

The Spin-Off Cost Basis is the cost basis assigned to the shares of a newly created company (spin-off) from an existing company. It is calculated by allocating a portion of the original stock's cost basis to the new shares based on the proportionate value of the spin-off stock to the original stock.

Example Calculation

Let's assume the following values:

Proportion of Spin-Off Stock's Value (PSV) = 0.25
Cost Basis of Original Stock (OSV) = 1000

Using the formula:

$SOCB = 0.25 \times 1000 = 250$

The Spin-Off Cost Basis is $250.