How to Calculate MetLife Brighthouse Spinoff Cost Basis

If you owned MetLife (MET) stock on the August 4, 2017, spinoff date, your MetLife Brighthouse spinoff cost basis is split by fixed percentages: 89.6365% of your original MetLife basis stays with MET, and 10.3635% moves to Brighthouse Financial (BHF).¹ You apply those percentages separately to each tax lot, then divide by the shares in that lot to get a per-share basis. The math matters right now because Brighthouse Financial’s pending all-cash acquisition at $70.00 per share is expected to close in 2026, and every BHF share you hold will become a taxable sale.

The Spinoff and the Allocation Percentages

MetLife distributed one BHF share for every 11 MET shares held on the July 19, 2017, record date. The distribution took effect at 5:00 p.m. New York City time on August 4, 2017.² It qualified as a tax-free distribution under Internal Revenue Code Section 355, so you owed no tax for receiving the BHF shares themselves.³ Only cash received in place of a fractional BHF share was taxable in 2017.

Because no new basis was created, the IRS requires you to carve up your existing MetLife basis. MetLife published a Form 8937 with the official split, derived from the fair market values of both stocks on August 7, 2017.¹ That document is available through MetLife’s investor relations site.⁴ The two percentages you need:

MetLife (MET): 89.6365% of your original aggregate basis
Brighthouse Financial (BHF): 10.3635% of your original aggregate basis

These percentages are fixed for every U.S. taxpayer, regardless of when the MetLife shares were bought or how many you held. Your holding period for the BHF shares also carries over from the original MET purchase, provided you held MetLife as a capital asset on the distribution date.² MetLife bought in 2005? Your BHF shares inherited that 2005 acquisition date for long-term versus short-term treatment.

Step-by-Step Calculation

Work lot by lot. Every separate MetLife purchase at a different date or price is its own tax lot, and each lot gets the allocation applied independently.

Aggregate Basis for Each Lot

Multiply the lot’s original aggregate basis by 0.896365 for the new MET basis, and by 0.103635 for the BHF basis. Take two lots:

2010 lot, 100 MET shares, $5,000 original basis: new MET aggregate basis $5,000 × 0.896365 = $4,481.83. BHF aggregate basis $5,000 × 0.103635 = $518.17.
2015 lot, 50 MET shares, $2,000 original basis: new MET aggregate basis $1,792.73. BHF aggregate basis $207.27.

Quick check: the two new figures for each lot should add back to the original. $4,481.83 + $518.17 = $5,000. If your totals don’t reconcile, a rounding error slipped in.

Per-Share Basis

Your MetLife share count didn’t change, so divide the new MET aggregate by the shares in the lot. For BHF, divide the MET share count by 11 to get the BHF shares received, then divide the BHF aggregate basis by that number.

2010 lot MET: $4,481.83 ÷ 100 = $44.82 per share (down from $50.00, because part of the basis moved to BHF)
2010 lot BHF: 100 ÷ 11 = 9.0909 BHF shares. $518.17 ÷ 9.0909 = $57.00 per share
2015 lot MET: $1,792.73 ÷ 50 = $35.85 per share
2015 lot BHF: 50 ÷ 11 = 4.5455 BHF shares. $207.27 ÷ 4.5455 = $45.60 per share

Notice the BHF per-share basis differs between lots because the original MET purchase prices differed. You now hold two separate BHF lots, each with its own basis and holding period. Keep them distinct for future sales.

Cash Received for Fractional Shares

MetLife didn’t distribute fractional BHF shares. If your lot wasn’t evenly divisible by 11, the fractional share was sold on your behalf and you received cash. The IRS treats that cash as sale proceeds, reportable in 2017.⁵

Take a single lot of 150 MET shares with a $6,000 basis. The spinoff produced 150 ÷ 11 = 13.6364 BHF shares: 13 whole shares and a 0.6364 fractional share. Total BHF aggregate basis is $6,000 × 0.103635 = $621.81, or $45.60 per share. The fractional share’s basis is 0.6364 × $45.60 = $29.02. If you received $45.00 in cash for that fraction, the capital gain was $15.98. Less than $29.02 in cash produces a deductible loss. Long-term or short-term follows the original MetLife purchase date. The remaining 13 whole BHF shares keep the $45.60 per-share basis.

Situations That Change Your Starting MetLife Basis

The allocation math is easy once you know your original per-share MET basis. Many shareholders don’t.

Shares From the 2000 MetLife Demutualization

MetLife converted from a mutual insurer to a public company on April 7, 2000, and eligible policyholders received shares as part of the conversion rather than buying them. The IRS has long taken the position that demutualization shares carry a $0 cost basis, on the theory that the membership rights exchanged for the stock had no tax basis. Courts have reached mixed results on this. If you follow the IRS view, your MetLife basis for those shares was zero before the spinoff and remains zero after the allocation, because any percentage of zero is still zero.

If you used a different basis on prior returns and were not challenged, be consistent going forward. With the BHF acquisition producing a taxable sale in 2026, this is one area where getting a tax professional involved has a real payoff.

Inherited or Gifted Shares

If you inherited MetLife stock from someone who died before August 2017, your starting basis is the fair market value on the date of death, or on an alternate valuation date if the estate elected one on Form 706.⁶ Apply the 89.6365%/10.3635% split to that stepped-up basis. If the decedent died after the spinoff, you likely inherited MET and BHF as separate positions with separate stepped-up bases, and no allocation is needed.

For gifted MetLife shares, you generally use the donor’s original basis and holding period. If the donor’s basis was higher than the fair market value on the gift date and you later sell at a loss, the loss is measured from the gift-date value.⁷ Whichever starting basis applies, the standard allocation percentages then apply on top of it.

Dividend Reinvestment Plans

Every quarterly DRIP reinvestment created a new tax lot at that quarter’s price. A decade of DRIP participation can leave you with 40 or more lots, each needing the allocation applied and each generating its own potential fractional-share calculation. If your broker ran the DRIP, they should have per-reinvestment records. If a transfer agent handled it and records are thin, you can reconstruct historical purchase prices from MetLife’s dividend history and the closing price on each reinvestment date. A reasonable estimate built from verifiable data is far better than reporting zero.⁷

Reporting on Your Tax Return

The spinoff itself was not taxable, so nothing gets reported just for receiving BHF. Reporting is triggered by the 2017 fractional-share cash and by any later sale of MET or BHF whole shares. Both go on Form 8949 and flow to Schedule D.⁸

Covered vs. Non-Covered Shares

Brokers have been required to track and report cost basis to the IRS for stock purchased on or after January 1, 2011. Earlier purchases are non-covered, and the broker’s 1099-B for those shares usually shows no basis. Many MetLife shareholders fall here: demutualization shares, early-2000s purchases, and years of DRIP lots. Report non-covered sales on Form 8949 with Box C (short-term) or Box F (long-term) checked, and enter your calculated basis in column (e). No adjustment code is needed because there is nothing broker-reported to correct.⁸

For covered shares bought after January 1, 2011, the broker was required to report basis, but the figure on your 1099-B for BHF may be wrong. Many brokers reported the BHF basis as $0 or left it blank because they didn’t apply the spinoff allocation. When the broker reported an incorrect basis, check Box B (short-term) or Box E (long-term), enter code B in column (f), put the broker’s incorrect basis in column (e), and use column (g) for the adjustment that produces the correct gain or loss.⁸

The Fractional Share Sale

Cash received in 2017 for a fractional BHF share should have been reported that year, with the proceeds in column (d) and the fractional share’s calculated basis in column (e). Many shareholders missed it because the amounts were small and the 1099-B often showed no basis. The standard three-year window to amend a 2017 return has closed, so unless the IRS contacts you, this is largely a historical footnote.

Holding Period and Penalties

For future MET or BHF sales, the acquisition date for long-term versus short-term treatment is the date you originally bought the MetLife shares, not August 2017.² Understating basis overpays your taxes; you can amend to fix that. Overstating basis underpays your taxes and can trigger a 20% accuracy-related penalty on the underpayment.⁹ The more common and costly mistake is defaulting to a $0 basis because the broker didn’t report one, which dramatically inflates the apparent gain.

Why This Matters Now: The 2026 BHF Cash-Out

In November 2025, Brighthouse Financial announced a definitive merger agreement under which an affiliate of Aquarian Capital will acquire BHF for $70.00 per share in cash. Shareholders approved the deal, and closing is expected in 2026, subject to regulatory approvals. Every BHF share you hold will convert to $70.00, creating a taxable sale.

Your capital gain or loss per share will be $70.00 minus your per-share BHF basis calculated from the 10.3635% allocation. Using the 2015 lot from earlier, $70.00 − $45.60 = $24.40 per share. If your MetLife shares date back before 2006, the gain will almost certainly qualify as long-term.

The 1099-B you receive after the merger closes will reflect whatever basis your broker has on file, and for many BHF holders that number is wrong or zero. Correcting it on Form 8949 follows the covered-share process above. Working through the calculation now, lot by lot, is far easier than doing it during tax season with the broker figure staring at you.

1
MetLife/Brighthouse Financial. Form 8937 Attachment – MetLife Brighthouse Distribution
2
SEC.gov. EX-99.1 Brighthouse Financial Distribution
3
Office of the Law Revision Counsel. 26 US Code 355
4
MetLife Investor Relations. Brighthouse Financial Distribution Information
5
Internal Revenue Service. Publication 550 – Investment Income and Expenses
6
Internal Revenue Service. Gifts and Inheritances
7
Internal Revenue Service. Publication 551 – Basis of Assets
8
Internal Revenue Service. Instructions for Form 8949
9
Office of the Law Revision Counsel. 26 US Code 6662