Tax questions

Members of the Maryland Association of Certified Public Accountants are answering readers' tax questions through April 15. See below for how to submit a question.

I received some shares through a tax-free spinoff and payment for the fractional share. How do I report this?

A spinoff is a distribution to stockholders by one corporation of the stock of a controlled subsidiary. As you stated, your receipt of these shares is nontaxable. You should have received a statement from the distributing corporation stating that the spinoff does qualify as a nontaxable event for its shareholders, and this statement should be attached to your income tax return. The payment you received for the fractional share should be reported on Schedule D of your Form 1040. The amount of the payment should be entered on Schedule D as the sales price.

Douglas Coats, CPA, Deloitte & Touche

The above advice is for general purposes only and is not intended as legal, accounting or tax advice. Specific situations may vary.

To ask a tax question, call Sundial, The Sun's telephone information service, at 410-783-1800. Call 410-268-7736 in Anne Arundel County, 410-836-5028 in Harford County, 410-848-0338 in Carroll County. Using a Touch-Tone phone, punch in the four-digit code 6225 after the greeting. To submit questions by e-mail and access an online tax guide, go to The Sun's Web site at www.sunspot.net/tax.

Selected questions will be answered in the Business section. No questions will be answered personally.

Pub Date: 3/16/99