Help get this topic noticed by sharing it on Twitter, Facebook, or email.

eBay spinning off PayPal

Hi,

I was following another question on this forum regarding the eBay spin off but that thread seems to have been deleted without being answered.

I own eBay shares and now PayPal, will sharesight handle this corporate transaction or do I need to do it manually?

Regards

Daniel
2 people have
this question
+1
Reply
  • Hi
    I also have the same issue, the trading platform that I use has been adjusted, but I have not been provided on how it was calculated. I have subsequently requested information and will wait for a response. I assume that I will need to do a manual adjustment or will information flow through from sharesight?
  • (some HTML allowed)
    How does this make you feel?
    Add Image
    I'm

    e.g. sad, anxious, confused, frustrated kidding, amused, unsure, silly happy, confident, thankful, excited indifferent, undecided, unconcerned

  • Hi Daniel and Frances,

    Yes, currently Sharesight doesn't automate corporate actions that involves creating a new holding. You'd need to record 2 manual transactions.

    This post will answer your question on how to record the spin off: https://getsatisfaction.com/sharesigh...
  • (some HTML allowed)
    How does this make you feel?
    Add Image
    I'm

    e.g. sad, anxious, confused, frustrated kidding, amused, unsure, silly happy, confident, thankful, excited indifferent, undecided, unconcerned

  • (some HTML allowed)
    How does this make you feel?
    Add Image
    I'm

    e.g. sad, anxious, confused, frustrated kidding, amused, unsure, silly happy, confident, thankful, excited indifferent, undecided, unconcerned

  • Does anyone on this forum know where to find information on how the cost base would be split between eBay and PayPal for Australian investors.

    I have scanned through the spinoff document but can find anything that addresses the cost base.

    Any help would be much appreciated.

    Thanks

    Daniel
  • (some HTML allowed)
    How does this make you feel?
    Add Image
    I'm

    e.g. sad, anxious, confused, frustrated kidding, amused, unsure, silly happy, confident, thankful, excited indifferent, undecided, unconcerned

  • I have looked at the filings and it doesn't appear at this stage that the company is releasing an"official" cost base adjustment. Using the market, however should be fine in the absence of any official company guidance.

    Ebay shares dropped about $36 dollars on the effective date and Paypal opened at about $36. So the way to do it is to use the instructions in Lulu's link above and record a cost base adjustment in your Ebay holdings of $36 X no. of shares owned and then an opening balance transaction in Paypal for the same amount. This should get the capital gains calculation right and also keep the perfromance tracking accurate.

    Note that $36 is approximate. An average over the last few days of trading might be a bit better, but as long as you document this in Sharesight as per above I think you are on solid ground with the ATO.

    Note I am not a tax adviser -- please seek confirmation from your tax adviser if needed!

    Hope that helps,

    Andrew Bird
    • Thanks for your comment Andrew.

      I couldn't find anything in the filings either but I just found this website http://www.costbasistools.com/spinoff... which seems to indicate 58.62% of the cost base is to be allocated to PayPal and the balance, 41.38%, to eBay.

      I used those percentages, followed the instructions in Lulu's link and checked the capital gains report and this looks exactly right.

      Can't say the same for the performance though. The day before the spinoff my total dollar return from my eBay holding since first purchase was $5,275.24 and the total dollar return from my combined PayPal and eBay holding the next day (after the spinoff) was $2,432.26 (made of $2,432.26 from eBay and $0 from PayPal). This doesn't seen right.

      Daniel
    • This is the response from Etrade Financials based in the US, the cost base for Ebay was 0.404317 and 0.595683. This was the information advised to brokers in the US. I also noted that the holdings for Paypal was split into the same lots as the Ebay holdings,same purchase dates. Aparently more imformation will be posted on the website later. Daniel you were close with the ratios, hope this helps.
      Frances
  • (some HTML allowed)
    How does this make you feel?
    Add Image
    I'm

    e.g. sad, anxious, confused, frustrated kidding, amused, unsure, silly happy, confident, thankful, excited indifferent, undecided, unconcerned