How can I determine the cost basis of Lehman shares received in the spinoff?
The Lehman shares are deemed to have been distributed out of the American Express shares that you owned in May 1994. As a result, the cost basis of the Lehman shares derives from the cost basis of your American Express shares. Based on the relative market prices of the shares of the two companies on May 31, 1994, 11.75% of the cost basis of your American Express shares is attributable to the Lehman shares and the cost basis of your American Express shares is reduced by 11.75%. Thus, the new basis of your American Express shares is 88.25% of what it was originally. The dividend was distributed on May 31, 1994 to shareholders of record on May 20, 1994.
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