Orion Office REIT (ONL) spinoff from Realty Income (O)

This action will need at least two entries in the accounting software.

If the total shares of ONL you were entitled to receive included a fractional portion, a third entry (a sell transaction) will be needed. The information below is based on the information available from Realty Income.
Realty Income is a real estate investment trust or REIT. A distribution from a REIT is usually entered as a dividend. However, the true nature of the distribution will not be known until Realty Income completes its tax year. These instructions will start with the distribution as a dividend. It is highly likely this first transaction will need to be edited using information from a 1099. The value of the distribution possibly will not match the 1099 as the value of the shares we use here may not be the value used by Realty Income.

The value of ONL shares in these instructions uses the average of the opening and closing prices on the first day of ONL trading after the spinoff, November 15, 2021.

The Dividend Entry
Go to Transactions > Dividend or Distribution or Accounting > Securities > Cash Distribution depending on the version of the software being used. Here is the information you need to complete the dividend entry.

  • Date: 11/12/2021
  • Select Transaction Type : Dividend or Distribution
  • Amount: [21.725 x 0.1 x (# of O shares owned) ]
    • # of ONL shares received = 0.1 x (# of O shares owned)
      21.725 = average of opening and closing price of ONL shares on the first regular trading day, 11/15/2021
    • For example, if you owned 100 shares of O your amount would be 21.725 x 0.1 x 100 = 217.25
  • Ex-Dividend date: 11/2/2021
  • Type : Dividend
  • Select Security: Realty Income (O)

Save the transaction and the dividend has been entered.

The Buy Entry
Go to Transactions > Buy or Accounting > Securities > Buy depending on the version of the software being used.
Here is the information you need to complete the buy.

  • Date: 11/12/2021
  • Select Security : Orion Office REIT (ONL)
  • Number of Shares Bought : 0.1 x (# of O shares owned).
  • Net Total of Purchase: Use the same value as the Amount from the dividend entry above.
    • Be sure to use the same cash account for the Dividend entry and the Buy entry.

If your buy transaction included fractional ONL shares, continue to the next step. If not, you are done with this spinoff

The Sell Entry
Go to Transactions > Sell or Accounting > Securities > Sell depending on the version of the software being used.
Here is the information you need to complete the sell.

  • Date: 11/15/2021 (We use this date, because it was the first day of trading, for ONL)
  • Select Security : Orion Office REIT (ONL)
  • Number of Shares Sold : The fractional part of the shares bought in the Buy Transaction.
  • Net Proceeds: Use the cash-in-lieu amount from your broker statement.
    • When saved you are finally done with all transactions related to this spinoff.

NOTE: It is probable you will need to edit the distribution (dividend) entry after receiving information from O and/or ONL on the true nature of the distribution entry dated 11/12/2021.
This determination will be done at the end of the tax year for O. Rather than a dividend it may be part dividend, part return of capital and part capital gain distribution.
Be sure to check the Security profile for Orion after the spinoff to be sure it is identified as a REIT.