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CostBasis.com


Time Warner Cable Spinoff

  On March 12, 2009, Time Warner,
  Inc. (stock symbol TWX) issued
  spin-off shares in Time Warner Cable
  Inc. (stock symbol TWC).  The
  spinoff ratio was .083670 shares of
  TWC for each share of TWX.   The
  shares were held by an agent until
  March 27, 2009, when they were
  distributed to TWX owners.


  The spin-off distribution was tax-free. 
  Your former cost basis for TWX can
  be allocated as follows (based on
  relative market values at the opening
  of trading on 3/13/2009):

  Time Warner Cable (TWC)  24.7829%
  Time Warner Inc (TWX)      75.2171%  
  Total                              100.0000%

  Click on the spinoff calculator
  image to the right for an easy
  way to compute your cost basis
  allocation.  Just choose TWC from
  the drop-down menu.

Spinoff Calculator
Spinoff Calculator
A complicating factor with this spinoff was the reverse split of 1 share for every 3 shares owned that occurred in both Time Warner Inc (TWX) and Time Warner Cable (TWC).  Holders of TWX are likely to received TWO cash in lieu of fractional share payments, one for the TWC spinoff fractional share and one for the reverse split fractional share.

The TWX reverse split occurred on March 27, 2009, AFTER the spinoff date.  Apply the spinoff cost basis factors shown above before the reverse split calculation.  

The TWC reverse split occurred on March 12, 2009, BEFORE the spinoff.  It applies only to investors who already owned TWC before the spinoff.

  Click on the Stock Split Calculator
  image to the right for an easy
  way to compute your new cost basis
  per share after the reverse splits.  It
  will also calculate your gain or loss
  on the cash payment you will receive
  in lieu of fractional shares.

Stock Split Calculator
Stock Split Calculator for Cash in Lieu Payments
Time Warner Cable Partial Redemption Merger
On May 18, 2016, Time Warner Cable Inc merged into Charter Communications Inc using a cash to boot merger with an unusual tax opinion. Instead of the normal cash to boot (Section 368(a) reorganization) rules, the merger was classified as a partial redemption.  
Holders were offered two options: 
    A.   $100 cash and 0.4891 CHTR shares, or
    B.   $115 cash plus 0.4125 CHTR shares.

The cash amount was deemed a redemption of a portion of the shares and carryover basis applied to the remaining stock..    This unusual treatment required us to build a new special purpose calculator for our users.   Click on the picture of the calculator to the right to use it.

Partial Redemption Calculator
Partial Redemption Calculator
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Information provided is intended solely for cash-basis U.S. citizen individual taxpayers and is believed to be accurate for most cases but is not guaranteed. Always consult your personal tax advisor about your own situation. Suggestions are most welcome. Please email our webmaster @ costbasis.com with your comments.   If this website has been helpful to you, please consider making a donation to support our efforts.
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