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.
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/
I’ve been asking this question from the start and I’d say the majority opinion is that it’s not taxable, but it’s far from a unanimous opinion.