<title>Learn about determining cost basis following a company spin-off</title>
<category>investing</category>
<klink type="cncpt">Tell me about determining cost basis after a company spin-off</klink>
</index>
<content>
<p>A spin-off occurs when a company distributes to its shareholders shares of another company that it controls, without requiring the shareholders to surrender any shares.</p>
<p>When you record a spin-off, Money needs to calculate the cost basis for the new shares and the old shares. The cost basis in the old shares will be a percentage of your cost basis in the parent company. Your cost basis in the parent company is then reduced. You can find the percentage of the parent company's stock that should be allocated to the spin-off company's stock in your spin-off paperwork. Consult your tax professional for more information.</p>
