ICG to ELD- profit to report?

Income tax policy, rules, problems, strategy and software. Property and consumption taxes too.
Post Reply
natka
Contributor
Contributor
Posts: 41
Joined: 16 Apr 2017 19:34

ICG to ELD- profit to report?

Post by natka »

Does anyone know how to report profit for 2017 in case of split payout by ELD after acquiring ICG
Split means part cash, part shares of ELD
for example having 10000 shrs of ICG got me $3119.56 cash plus 1808 shrs of ELD, each worth $3.14.
original cost of 10K shrs ICG was 8760.83.
User avatar
IdOp
Veteran Contributor
Veteran Contributor
Posts: 3873
Joined: 16 Feb 2006 11:27
Location: On the Pacific sea bed, 100 mi off the CA coast.
Contact:

Re: ICG to ELD- profit to report?

Post by IdOp »

Hi, and welcome to FWF. As noone has replied perhaps that's an indication of lack of familiarity with this deal (that certainly includes me), at least among those who are still checking in here during the summer. So I can just try to give a little generic advice.

The many details of such transactions are usually laid out in a "Plan Of Arrangement". As a share-owner you probably would have gotten one? If not search the relevant companies' websites or SEDAR for it. This document will have a section in it about Taxation, where the lawyers will describe how they think it is going to work. This may have several parts to it depending on where you are resident for tax purposes, and which of the available options (if several) you chose -- or defaulted to -- in this deal. So you have to find the right parts that apply to you, and read them carefully. See if the things that actually happened to your shares match up with what you expect from reading the Plan. This should tell you about the tax treatment. It's quite possible you will still have some questions, but at that point they would be more specific in how they relate to the Plan. You could follow up here with them and see if someone can confirm (or not) what you have found.
natka
Contributor
Contributor
Posts: 41
Joined: 16 Apr 2017 19:34

Re: ICG to ELD- profit to report?

Post by natka »

thanks I will go back to read the deal but,
something smells very bad with that merger
below comment is not mine.

As of today, those shareholders who opted for a cash only payout, subject to proration, option 2 in the plan of arrangement got a little more cash and a few fewer shares than they would have had they selected option 3, which was the default split and defining cash to ELD ratio set out in the plan of arrangement. The ratio was based on the ELD closing share price for 12 May 2017. According to the last paragraph on page 35 of the agreement and information circular, under Risks, item (c), "the exchange ratio is fixed and will not be adjusted to reflect any change in the market value of the Eldorado Shares or Integra Shares prior to the closing of the Arrangement;"
The increase in cash and the decrease in shares for those who selected option 2, however, have a cash to ELD shares ratio of 3.14, which was the closing price for ELD on Tuesday this week, 11 July. This is a clear violation of the contract as far as I can see. It should have been in the ratio that was based on the ELD closing price 12 May 2017, as was clearly and emphatically stated in the contract.
natka
Contributor
Contributor
Posts: 41
Joined: 16 Apr 2017 19:34

Re: ICG to ELD- profit to report?

Post by natka »

What are the Canadian income tax consequences of the Arrangement?

Certain Canadian Federal Income Tax Considerations
”. Such summary is not intended
to be legal or tax advice to any particular Integra Shareholder. Integra Shareholders should
consult their own tax and investment advisors with respect to their particular circumstances.

This summary is of a general nature only and is not, and is not intended to be, nor should it
be construed to be, legal or tax advice or representations to any particular Holder. This
summary is not exhaustive of all Canadian federal income tax considerations. Accordingly,
Holders are urged to consult their own legal and tax advisors with respect to the tax
consequences to them having regard to their particular circumstances, including the
application and effect of the income and other tax laws of any country, province or other
jurisdiction that may be applicable to the Holder.

after reading several pages got that. s.it. It is so complicated that none of regular folks will understand.
If I knew it I would sell ICG @1.14
Post Reply