Hi, Keith.
Use Quicken's Corporate Securities Spin-off transaction wizard to record this. No, this was not a gift and your cost basis is NOT zero. Your former cost basis in Verizon is now allocated between your VZ, which you still have, and the new FTR shares. If you were entitled to a fractional share, that was sold immediately and you received cash. Record this cash received as a sale of the fractional share, using its newly-computed basis as its cost, and showing its acquisition date as the date when you acquired the Verizon shares.
The wizard works well for most such spin-offs - with one important caveat: It asks for "cost" of the old and new shares. But THAT is what Quicken will be calculating, based on information you supply. What you must enter is not "cost", but FMV (Fair Market Value) of the VZ and FTR shares immediately after the spin-off. Those FMVs should be available from Verizon very soon, if not already.
Test Quicken's allocation by comparing your total basis of VZ + FTR now with your pre-spin-off cost of VZ. The only difference should be the cost of the fractional share.
Verizon doesn't make it easy to navigate their site, but I eventually found this page, which spells out the complicated transaction (in 443 pages of dense prose which, of course, I have not read!).
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A one-paragraph version is in Investor News at
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62 This page, dated July 1, 2010, says in part:
"Verizon stockholders are receiving one share of Frontier common stock for every 4.165977 shares of Verizon common stock they owned as of June 7, 2010. This is equivalent to approximately 0.24 shares of Frontier common stock for each share of Verizon common stock owned as of June 7, 2010. Verizon stockholders are receiving cash in lieu of any fraction of a share of Frontier common stock."
I've been retired for nearly 20 years, Keith, and the rules may have changed, so be sure to check with your own CPA to be sure that this is still the correct treatment.
RC