Comments on: Valuing the Tyco Spinoffs

By: Mo

Mo — Mon, 29 Nov 2010 17:17:50 +0000

I’m also heading to the tax court for the same issue. Has anyone actually gone to the tax court and if so, what was the result?

By: g marshall

g marshall — Tue, 11 May 2010 21:35:10 +0000

i’m like alot of you tyco shareholders.
i’m canadian and i’m currently fighting in court with revenue canada over this issue.

if anyone has any info regarding tyco spinoffs and any canadian court decisions regarding this matter.
please post it on this site

thxs g

By: Mike Lim

Mike Lim — Thu, 18 Feb 2010 13:17:58 +0000

I’m also a Canadian Tyco shareholder and heading to Tax Court to fight this. My view is that I certainly did not derive any income from the exchange of shares that Tyco did. In fact, by doing a reverse-split as part of the transaction, every shareholder ended up being in a wose-off situation.

By: J. Lee

J. Lee — Tue, 09 Feb 2010 01:55:54 +0000

I’m a Canadian Tyco shareholder. I’m proceeding to Canadian tax court to try to fight the unfair tax I have to pay on the investment income I supposedly received from the Tyco company spin-off. Is anyone in the same situation? I’m planning to meet with a tax lawyer to discuss the matter. Is anyone interested in joining me to rectify the unjust treatment from CRA?

By: Carlo

Carlo — Fri, 21 Aug 2009 03:09:13 +0000

I’m also wondering if anyone found out the Canadian tax treatment for the Tyco spin off? Can Canadian shareholders of Tyco make the election of Section 86.1? Please advise. Thanks

By: Marc

Marc — Wed, 17 Dec 2008 04:19:41 +0000

has anyone found out about the Canadian tax treatment of Tyco spin off???

By: Carrie Maiorano

Carrie Maiorano — Thu, 08 May 2008 17:08:53 +0000

Just wondering if anyone found out if the TYCO spinoff is addressed anywhere by CRA. I found a list of foreign spin offs that are eligible for tax-free treatment for Cdn shareholders but it doesn’t appear that TYCO did the paperwork with CRA. See:

http://www.cra-arc.gc.ca/tax/b.....ffs-e.html

By: George

George — Tue, 15 Apr 2008 03:14:09 +0000

Beverly, thank you for the edit. I just corrected the article as per your suggestion. I always appreciate receiving edits since I don’t have a proofreader and am often writing these posts at night when I’m tired. I’m sure there are many other typos hiding out on my blog. Feel free to alert me if you find any others.

As for your question, I am unfamiliar with Canadian tax law. I was under the impression that the Tyco spinoff was a tax free event in the United States. It might be different in Canada. I didn’t invest in Tyco, so I’m not sure how this one turned out. I hope you are able to turn up an answer to your question. I suggest you work through the SEC EDGAR filings for Tyco to find the spin-off date and tax treatment of this event.

By: Beverly Freedman

Beverly Freedman — Sat, 12 Apr 2008 22:05:03 +0000

Although it is April 12, 2008, I recently received a T5 statement of investment income for tax purposes (I am a Canadian) which indicates foreign income derived from the spin-off of Covidien and Tyco Electronics. I wanted to confirm the spin-off date and found your site.

I had 200 shares of Tyco International, received 50 shares each of spin-off companies and was left with 100 shares of the original stock.

I am at a loss to understand why, if I lost 100 shares of TYC, I am deemed to have been “paid” the value of each of the 50 shares of Tel and COV as at the spin-off date.

Perhaps you can explain. And, how do I indicate the loss of the 100 shares of TYC?

Your comments, if you are familiar with this tax oddity, would be appreciated.

As an aside, I am adept at editing and proofreading and found this error in your article:

I’m guess companies and individuals stick with the reliable brands that they know when installing security and fire alarm systems.

The second word should have been “guessing”.

I did not read the entire article, but this error caught my eye, so to speak.

By: Over Night Cash System

Over Night Cash System — Wed, 26 Mar 2008 18:07:41 +0000

This is an incredible blog, with highly effective information. I do recommend this for anyone to read.

By: David Merkel

David Merkel — Tue, 10 Jul 2007 15:46:26 +0000

Thanks. I didn’t do as much work as you did on these three, but I came to the same conclusions in my recent portfolio review, where none of the three got added to my portfolio.

By: George

George — Tue, 10 Jul 2007 02:46:26 +0000

Doug,
Good point regarding Tyco and its spinoffs staying on the S&P 500. I usually mention the index status of each of the companies after a spinoff, but I forgot to mention that in this article.

Vern,
Click on the link to Google in my post. It will show you the query I used. Build a similar query for the ADP site and then click on the “Cache” links on the Google results page. However, I don’t think the Google cache will still have pages as far back as March and April. It’s worth a try however. Maybe I’ll write a post next week with more detailed instructions on how to do this.

Vitaliy,
Thanks for the positive feedback. It means a lot to me that a pro investor (CFA) like yourself thinks I did a good job valuing these companies.

By: Vitaliy Katsenelson

Vitaliy Katsenelson — Mon, 09 Jul 2007 15:39:50 +0000

George, Good job!

By: Vern

Vern — Mon, 09 Jul 2007 15:21:52 +0000

How exactly do you use Google cache to search for old Web pages. I am doing some research on ADP and would like to get access to an audio file that was available on their site from 3/22/07 through 4/5/07.

By: Doug

Doug — Mon, 09 Jul 2007 11:20:16 +0000

I’m not sure the Tyco spin-offs will create the same level of opportunity as most spin-offs. What really helps drive mispricing is when the new company is not part of the S&P 500 leading to index fund managers blindly selling holdings which are not in the indes. In this case all three TYCO companies are remaining in the S&P and two weaker companies Sanmina and PMC-Sierra are being given the boot. Sanmina dropped a little but PMC-Sierra did not.