Q: As a holder of EMX.CA do I have to pay capital gains tax on its merger/takeover by ELE? If so what is the purchase price that I must record? If not, what is the merger/takeover price of the received ELE stock? Thank you.
5i Research Answer:
Compensation was for 0.2822 (post split) shares of ELE for each share. We are not tax experts, but in a takeover of a Canadian company by another Canadian company, for shares only, this should be tax free. Investors need to declare a tax-free rollover with the CRA but the existing cost base will be the same.