High Arctic Energy Services Inc T.HWO

Got my shares

[auburn2]

All looks good but the cost basis for HWO is way too low, showing a huge gain. How do I fix that? HOH cost basis looks fine.

[auburn2]

Stepping out now but I'm guessing the HWO cost basis is 4X too low. Anyone having this issue?

[auburn2]

Maybe only 2X too low. Need to investigate further when I have more time. Definitely isn't right currently and would expose me to excess capital gains when selling.

[BigWillie]

no biggie, you can always override it, just save last month's statement with old HWO, number of shares, average cost etc. and do simple math with whomstever does yout taxes. Pay insurance 25$ and let them take care for you.

[auburn2]

Last statement doesn't show shares purchased in August.

[auburn2]

The root of the issue: the RoC dramatically reduced my cost basis, which should not have been the case in my thinking, but is the case according to what I've found online, such as here: https://funds.eatonvance.com/media/public/6348.pdf and https://www.td.com/ca/en/asset-management/documents/investor/pdf/news-insight/return_of_capital_salestool_en.pdf RoC was just giving back capital, but

[blackwolf25]

Spoke with my broker yesterday re this, his suggestion is wait til weeks end the cost basis should be adjusted by then as it takes a couple days.

[auburn2]

Hope so! That's good to hear it may get adjusted automatically. Probably should call in & ensure it's being addressed or it might get ignored/neglected.

[auburn2]

In my case I'm pretty sure the issue goes back to how the cost basis dropped after the RoC. Now currently cost basis for ROH looks OK but way too low for HWO.

[auburn2]

"Spoke with my broker yesterday re this, his suggestion is wait til weeks end the cost basis should be adjusted by then as it takes a couple days." What kind of adjustment did he say you would be getting for your shares? Others are supposing the very low cost basis for HWO is correct. To be clear, my HWO cost basis barely went up after the share consolidation. It's about 10 cents

[blackwolf25]

The book value of HWO currently reflects the amount of my investment post return of capital. There is a book value also attached to my HOH shares that when coupled with the HWO book value exceeds the amount of my investment as of last week. My broker has stated that the amount allocated to HOH will be deducted from the HWO book value to accurately reflect my investment. 

[colourama]

I also received my shares this evening. I also have the same thing - a really low cost basis for the new HWO shares. I believe the new cost basis for HWO was calculated according to: (new HWO cost basis) = 4*(old HWO cost basis) - $1.20 with $1.20 seemingly being the default cost basis for HOH shares. For example, an old cost basis of $0.70 for HWO (say on shares purchased last week) would

[colourama]

I should add, by "old cost basis", I mean the cost basis that has already been reduced by the return of capital from last month.

[Stonksonlyup90]

According to Canadian Tax, a Return of Capital does directly reduce your tax basis (cost basis). The RoC itself is not taxed (it's not a dividend), but lowers your ACB and then when you go to sell only then would you pay capital gains tax.