RE:RE:Calculating Your "Cost" on Commons and Warrants Found something in the circular at page 101:
A Resident Holder of Husky Common Shares who disposes of Husky Common Shares under the Arrangement and receives both Cenovus Warrants and Cenovus Common Shares will be considered to have disposed of a portion of the Resident Holder’s Husky Common Shares (the “Warrant Consideration Common Shares”) for Cenovus Warrants; and to have disposed of the remaining portion of the Resident Holder’s Husky Common Shares (the “Share Consideration Common Shares”) for Cenovus Common Shares. For Warrant Consideration Common Shares that are disposed of in exchange for Cenovus Warrants, the Resident Holder will recognize a capital gain (or capital loss) equal to the amount, if any, by which the fair market value of the Cenovus Warrants received, net of any reasonable costs associated with the exchange, exceeds (or is less than) the aggregate adjusted cost base of such Warrant Consideration Common Shares to the Resident Holder, determined immediately before the exchange. For a description of the tax treatment of capital gains and capital losses, see “Holders Resident in Canada – Taxation of Capital Gains and Losses” below. The cost of the Cenovus Warrants acquired by the Resident Holder in the Arrangement will be equal to the fair market value of the Resident Holder’s Warrant Consideration Common Shares that are exchanged for the Cenovus Warrants. For Share Consideration Common Shares that are exchanged for Cenovus Common Shares, the Resident Holder will be deemed to have disposed of such Share Consideration Common Shares under a tax-deferred share-for-share exchange pursuant to section 85.1 of the Tax Act, unless the Resident Holder chooses to recognize a capital gain (or capital loss) as described in paragraph (b) below, such that:
SO, the way I understand it, The shares that were used to get the warrants are taxable.
IN MY EXAMPLE: they used 3718 HSE shares to get the warrants. I understand that this is taxable. The transaction closed with HSE at 6.76 and my cost average is 3.95. SO :
3718 shares x2.81 capital gains= 10447$ taxable
AM I understanding correctly?