Usually, a spin-off does not result in any gain or loss to a shareholder. A portion of the basis of the old stock is allocated to the new stock in the spin-off company. The IRS usually gives a ruling to the parent company to confirm this tax treatment. Best bet: Check with the company’s office of shareholder relations, which you can usually find on the company’s website, to find out about the specifics of the spin-off that you were involved in.
An unincorporated business or income-producing entity organized by two or more persons. A partnership is not subject to tax but passes through to the partners all income, deductions, and credits, according to the terms of the partnership agreement.