Zimvie Spin-Off Cost Basis Calculator

Zimvie Spin-Off Formula:

\[ Basis_{Zimvie} = Original \times \left( \frac{FMV_{Zimvie}}{FMV_{Zimvie} + FMV_{Zimmer}} \right) \approx Original \times 0.02307 \]

Zimvie Cost Basis:

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1. What is the Zimvie Spin-Off Cost Basis Calculation?

The Zimvie spin-off cost basis calculation determines the tax basis of Zimvie shares received in the spin-off from Zimmer Biomet. This calculation is essential for accurate tax reporting when selling Zimvie shares.

2. How Does the Calculator Work?

The calculator uses the spin-off allocation formula:

\[ Basis_{Zimvie} = Original \times \left( \frac{FMV_{Zimvie}}{FMV_{Zimvie} + FMV_{Zimmer}} \right) \]

Where:

\( Original \) — Original cost basis of Zimmer Biomet shares
\( FMV_{Zimvie} \) — Fair market value of Zimvie shares at spin-off
\( FMV_{Zimmer} \) — Fair market value of Zimmer Biomet shares post spin-off

Explanation: The formula allocates the original cost basis between Zimmer Biomet and Zimvie shares based on their relative fair market values immediately after the spin-off.

3. Importance of Cost Basis Calculation

Details: Accurate cost basis calculation is crucial for determining capital gains or losses when selling spin-off shares, ensuring proper tax compliance and minimizing tax liability.

4. Using the Calculator

Tips: Enter the original cost basis of your Zimmer Biomet shares, the fair market value of Zimvie shares, and the fair market value of Zimmer Biomet shares post spin-off. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Why is the cost basis allocation necessary?
A: The IRS requires proper allocation of the original cost basis between the parent company and spin-off company shares for accurate tax reporting.

Q2: Where can I find the fair market values?
A: FMV values are typically provided in the spin-off documentation or can be determined from the closing prices on the first trading day after the spin-off.

Q3: What is the approximate allocation ratio?
A: The approximate allocation ratio is 0.02307, meaning about 2.307% of the original cost basis is allocated to Zimvie shares.

Q4: Do I need to adjust my Zimmer Biomet cost basis?
A: Yes, the remaining cost basis after allocating to Zimvie shares becomes your new cost basis for the Zimmer Biomet shares.

Q5: Is this calculation specific to Zimvie spin-off?
A: While the formula is general for spin-offs, the specific FMV values and allocation ratio are unique to the Zimvie spin-off from Zimmer Biomet.