Tencent special dividend

Reporting & tax
1

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.

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2

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).
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4

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

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5

@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)

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