You will pay ordinary income tax when exercised, the difference between the warrant and the stock price. You will pay taxes again on capital gains when you sell, if you sell. As I understand it.
If I would have just bought 1000 of these when it was $4 …
The ordinary income tax you referred to definitely seems to be the case if you received the shares from your company, but it's not so clear it's taxable if you went out and purchased them. Do you have something that gives a definitive answer, because I've seen both sides argued.
I’ve heard what you have mentioned but I have never read it under any explanation of warrants and taxes. I’ll dig a bit more and see if I can find anything on issue versus purchase. Issue would probably behave like an rsu, so that might be where that info comes from. No a financial dude, just like paying attention to the markets.
As I understand it we'd be paying to convert our warrants to shares.
Well hopefully it wont be a big headache. Im a construction guy. Definitely NOT a stock market guy…. 🤣
You will pay taxes twice.
You will pay ordinary income tax when exercised, the difference between the warrant and the stock price. You will pay taxes again on capital gains when you sell, if you sell. As I understand it.
If I would have just bought 1000 of these when it was $4 …
I bought 300 at that price :)
The ordinary income tax you referred to definitely seems to be the case if you received the shares from your company, but it's not so clear it's taxable if you went out and purchased them. Do you have something that gives a definitive answer, because I've seen both sides argued.
I’ve heard what you have mentioned but I have never read it under any explanation of warrants and taxes. I’ll dig a bit more and see if I can find anything on issue versus purchase. Issue would probably behave like an rsu, so that might be where that info comes from. No a financial dude, just like paying attention to the markets.
https://finance.zacks.com/taxation-stock-warrants-7458.html
This article seems to be favorable to your understanding
https://thestartuplawblog.com/warrants-the-tax-story/
You can sell a few to convert the rest. Or just sell them any buy the stock, but wait until the price closes more with the stock.
Now that it’s approved, the difference between warrants and shares should be $11.50 (the conversation fee).
That difference is currently $20, so either shares are overpriced, or warrants are underpriced.
The merger is approved, but hasn't happened yet.....