No. of Recommendations: 0
Shareholders received the parent companies cost basis ...
I don't see how this could work. Let's say the Apple holdings are worth $200B (out of a $1T market cap) at the time of spin off. Therefore, holders of each B share (equivalent B share for A share holders) would receive 0.2 (roughly) shares of Apple. And Berkshire's basis in Apple is $39.62 per share. So if you purchased 1000 BRKB shares a few days ago at $500 each, then you would receive 200 AAPL shares with a basis of $39.62 each. If you sell those AAPL shares today at $285.62, you have realized a taxable capital gain of 200 * ($285.62 - 39.62), or $49,200. Meanwhile, your BRKB shares should go down by about 20% because Berkshire distributed about 20% of the total value. So the formerly $500 BRKB shares are now about $400 each. I don't see how it could work this way because the basis is illogical and it forced a sudden large capital gain that can only be offset by a large capital loss upon selling the BRKB shares. The whole thing doesn't make sense, heck, it's worse than distributing a large special dividend and forcing a mostly undesired taxable event for many people (like Microsoft did to so many people 21 years ago).
