Spin offs and warrants.

I hold shares in First Mining Gold Corp. On 15Jul21, my brokerage statement indicates a spin-off of Treasury Metals Inc New of 800.
Same date on statement shows a spin off of WT-Treasury Metals WT 07Aug23 of 400.
The cost base of my First Mining Gold Corp has been decreased.
Would greatly appreciate advice on how to enter all this in Quicken R33.7 for Windows Canada.

Answers

  • Tom Young
    Tom Young SuperUser ✭✭✭✭✭
    Your entries probably should be guided by Canadian tax law, something I know nothing about. 
    In the US a non-taxable spin off can be entered using Quicken's "Corporate Securities Spin-Off" wizard.  You provide the date of the transaction, the name of the security doing the spin-off, the  name of the new security received, the number of new shares issued for each share of the company doing the spin-off that you own, and the "fair market values" of the new and old shares immediately after the spin-off.
    The issue of the warrants adds another wrinkle to accounting for the transaction properly (per Canadian tax law) as, in the US, sometimes you can allocate some amount of basis of the old stock to a warrant.
    You say "the cost base of my First Mining Gold Corp has been decreased" so I assume your broker has downloaded that information, or you're seeing the decrease on the broker's site.  If that's the case then, (assuming Canadian tax law and US tax law work similarly here), I'd think at some point you'd become aware of the bases of your new securities.  In lieu of using the Corporate Securities Spin-Off wizard you might be able to come to the correct answers here by suitable "Remove" and "Add" actions as of the transaction date.
  • jmcgmckinnon
    jmcgmckinnon Member ✭✭
    Thanks for your info. All of this is a little over my head.
This discussion has been closed.