How can I allocate the cost basis associated with the Hilton/Park Place spin-off?
The values of the Hilton common stock and the Park Place common stock are determined with reference to the average of the high and low trading prices on January 4, 1999, the first trading date immediately following the distribution. Based on this methodology, on January 4, 1999, the fair market value of one share of Hilton common stock was $14.5625 and the fair market value of one share of Park Place common stock was $7.00. Accordingly, your aggregate income tax basis in Hilton common stock will be apportioned 67.5362% to your Hilton common stock and 32.4638% to the Park Place common stock you received as a result of the distribution.
