Visteon Corporation Spin-Off Basis Allocation Information for U.S. Taxpayers
On June 28, 2000, Ford Motor Company ("Ford") distributed all of the common stock of Visteon Corporation ("Visteon") owned by Ford to Ford Common and Class B shareholders of record as of the close of business on June 12, 2000. Unless they sold the right to receive Visteon shares before the distribution date, each shareholder received .130933 shares of Visteon for each Ford Common and Class B share owned.
Ford received an opinion from its outside advisors, Davis Polk & Wardwell, that a Ford shareholder's receipt of Visteon stock should be tax-free for U.S. Federal income tax purposes. Shareholders selling Visteon shares have a taxable gain or loss equal to the difference between the sales proceeds and the tax basis in the shares. To determine your tax basis, shareholders allocate the original tax basis in their Ford shares between the Ford shares and the Visteon shares based on their relative fair market values on the distribution date.
Based upon the average high and low composite prices of Ford and Visteon on the New York Stock Exchange on June 28, 2000, 96.07% of the pre-distribution tax basis in Ford shares should remain allocated to the Ford shares, and the remaining 3.93% should be allocated to the Visteon shares (including any fractional share interest). Shareholders should consult a tax advisor regarding the application of this calculation to their particular circumstances.
Download the pdf version of full instructions, calculation examples, and forms, which must be filed with the U.S. Internal Revenue Service.
