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.