Tencent special dividend

Does anyone know how to treat the special dividend Tencent (0700.HK) paid to shareholders in the form of Meituan (3690.HK) shares? i.e. cost base for the new shares? 1 Meituan share for every 10 Tencent shares held as at 5/1/23.

On my side, I’ve just booked the distribution as:

  • On Meituan’s side: a purchase on the last day before ex (January 4, 2023), at the closing price (HKD 181.30)
  • On Tencent’s side: a dividend in cash, for the same amount (HKD 181.30 x the number of Meituan shares received, or HKD 18.13 per Tencent share).

@cam could you please tell how you ended up calculating the cost basis?

@Dirac could you please elaborate? I am newbie and trying to determine cost basis:

I own 579 ADRs of Tencent (TCEHY). And on Apr 13 2022 received cash distribution in my schwab account of $787.48 ($1.36 per ADRs).

Schwab’s 1099b shows it as short term gains / cost basis not reported to IRS. (If it matters TCEHY position was opened on Jul 12 2021 @ $68.82)