Stockholders who purchased 3M stock prior to the spin-off of Imation Corp. on July 1, 1996, need to adjust their tax basis for income tax purposes.
Let's say you purchased 10 shares of 3M stock prior to July 1, and you paid $600, or $60 dollars a share. As a result of the spin-off, you received one share of Imation common stock. To figure out your adjusted tax basis for 3M stock, use the following percentages:
Ten shares of 3M common stock: $600 x .96059 = $576.35
One share of Imation common stock: $600 x .03941 = $23.65 Total $600.00
Consult your tax advisor for further assistance.