PSN/ONR tax issues On this depressing day at the TSX let's add to the misery by talking taxes. If you have not filed your 2011 tax returns and have sold some ONR and/or PSN shares (post the PSN spinoff), you may find this helpful.
To calculated the 2011 capital gains on the ONR or PSN shares you've sold you need to determine the post spinoff adjusted cost base for both companies. This is calculated by figuring out first what your pre-spinoff ONR adjusted cost base is.
This should be easy it is the average cost per share you paid for your old ONR shares. For example let's assume it's $7.29 (amount A). The post spinoff ONR adjusted cost base for all shareholders is $2.29 (amount B) - this $2.29 has been confirmed by the company (it's the pre-spinoff fair market value of the new ONR shares as accepted by the CRA). Hence the adjusted cost base for PSN is A minus B = $5.00.
If I had considered the tax consequences earlier I would have sold all my new ONR shares for a tax loss and then buy them back at the current much lower prices while taking advantage of those capital losses to reduce my capital gains for 2011. Well hindsight is always perfect isn't it?
I'll be smarter next year, trust me.