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Subject Author Date
What is the Trade date in [stock] Rights 0b3hks001 06-19-2008
Posted by 0b3hks001 on June 19, 2008, 8:49 am
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 I have a stock that issued Rights to the shareholders. The Rights
entitled the shareholders to subscribe new shares at a discounted
price. Let's say I received 100 Rights. I exercised 80 rights to
subscribe new shares and sold the other 20 Rights.

Listed below are the dates from the prospectus.

May 26, 2008 -- Record date for the allocation of subscription rights
(close of business)
May 27, 2008 -- Existing shares begin trading “ex-subscription right”
                          -- Start of rights trading
                          -- Start of subscription period
June 9, 2008 -- End of rights trading period
June 10, 2008 -- End of subscription period
June 13, 2008 -- First trading day of new shares
June 17, 2008 -- Payment and delivery of the new shares


I assume the acquisition date for the Rights would be same as that of
the underlying stock?

What would be the sale date of the 20 Rights that I sold? And what is
acquisition date of the New share that I received from the Rights
subscription?

TIA

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Posted by Seth on June 21, 2008, 12:52 am
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>I have a stock that issued Rights to the shareholders. The Rights
>entitled the shareholders to subscribe new shares at a discounted
>price. Let's say I received 100 Rights. I exercised 80 rights to
>subscribe new shares and sold the other 20 Rights.
>
>Listed below are the dates from the prospectus.
>
>May 26, 2008 -- Record date for the allocation of subscription rights
>(close of business)
>May 27, 2008 -- Existing shares begin trading “ex-subscription right”
>                           -- Start of rights trading
>                          -- Start of subscription period
>June 9, 2008 -- End of rights trading period
>June 10, 2008 -- End of subscription period
>June 13, 2008 -- First trading day of new shares
>June 17, 2008 -- Payment and delivery of the new shares
>
>
>I assume the acquisition date for the Rights would be same as that of
>the underlying stock?

Yes.

>What would be the sale date of the 20 Rights that I sold?

What date did you sell them? Presumably, between May 27 and June 9.

> And what is acquisition date of the New share that I received from
>the Rights subscription?

It's either the acquisition date of the original stock, or the
exercise date (date on which you told the company to exercise your
rights). I don't know which, but posting this will get someone else
to specify.

Seth

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
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<< Copyright (2007) - All rights reserved. >>
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Posted by 0b3hks001 on June 22, 2008, 9:08 pm
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On Jun 21, 12:52 am, se...@panix.com (Seth) wrote:
>
> >I have a stock that issued Rights to the shareholders. The Rights
> >entitled the shareholders to subscribe new shares at a discounted
> >price. Let's say I received 100 Rights. I exercised 80 rights to
> >subscribe new shares and sold the other 20 Rights.
>
> >Listed below are the dates from the prospectus.
>
> >May 26, 2008 -- Record date for the allocation of subscription rights
> >(close of business)
> >May 27, 2008 -- Existing shares begin trading “ex-subscription right”
> > -- Start of rights trading
> > -- Start of subscription period
> >June 9, 2008 -- End of rights trading period
> >June 10, 2008 -- End of subscription period
> >June 13, 2008 -- First trading day of new shares
> >June 17, 2008 -- Payment and delivery of the new shares
>
> >I assume the acquisition date for the Rights would be same as that of
> >the underlying stock?
>
> Yes.
>
> >What would be the sale date of the 20 Rights that I sold?
>
> What date did you sell them? Presumably, between May 27 and June 9.

I didn't specifically sell them. After the max. # of whole shares
were subscribed, the broker sold the remaining # of Rights.


> > And what is acquisition date of the New share that I received from
> >the Rights subscription?
>
> It's either the acquisition date of the original stock, or the
> exercise date (date on which you told the company to exercise your
> rights). I don't know which, but posting this will get someone else
> to specify.

There is a final date for exercisinng the Rights; and I told them a
few days before.. So I guess the acquisition date for the new shares
would be the final date for subscription, June 10 ? [It is not free,
I had to pay for the new shares]

TIA

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

Posted by Seth on July 8, 2008, 9:26 am
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>On Jun 21, 12:52 am, se...@panix.com (Seth) wrote:
>> In article
>> >I have a stock that issued Rights to the shareholders. The Rights
>> >entitled the shareholders to subscribe new shares at a discounted
>> >price. Let's say I received 100 Rights. I exercised 80 rights to
>> >subscribe new shares and sold the other 20 Rights.

>> >What would be the sale date of the 20 Rights that I sold?
>>
>> What date did you sell them? Presumably, between May 27 and June 9.
>
>I didn't specifically sell them. After the max. # of whole shares
>were subscribed, the broker sold the remaining # of Rights.

Didn't you get a statement from the broker? That should have the
trade date. (I don't understand, anyway; if the max # of shares were
already subscribed, what can the remaining Rights be used for? Or did
it take many rights to buy one share, and the Rights corresponding to
the remaining fractional share were sold?)

Seth

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

Posted by DF2 on July 8, 2008, 1:09 pm
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In misc.taxes.moderated, Seth wrote:

>>On Jun 21, 12:52 am, se...@panix.com (Seth) wrote:
>>> In article
>>> >I have a stock that issued Rights to the shareholders. The Rights
>>> >entitled the shareholders to subscribe new shares at a discounted
>>> >price. Let's say I received 100 Rights. I exercised 80 rights to
>>> >subscribe new shares and sold the other 20 Rights.
>
>>> >What would be the sale date of the 20 Rights that I sold?
>>>
>>> What date did you sell them? Presumably, between May 27 and June 9.
>>
>>I didn't specifically sell them. After the max. # of whole shares
>>were subscribed, the broker sold the remaining # of Rights.
>
>Didn't you get a statement from the broker? That should have the
>trade date.

I agree, but I think he should have asked about the acquisition date
and basis too.

I think that the acquisition date would be that of the shares that
were issued if the rights had significant value relative to the
shares. If the value of the rights that come from a share is less
than 15% of the value of the share, he has the option of declaring
the basis of the sold rights to be zero and not reducing the basis
of the other shares. He can always allocate the basis proportionally
to the value of the rights and shares.

http://books.google.com/books?id=Xey_dU6cA18C&pg=PT355&lpg=PT355&dq=rights+basis+each.share&source=web&ots=rIUqiT86Qt&sig=uo2r7FREVRbGqrbVvhNSmq7pPhU&hl=en&sa=X&oi=book_result&resnum=10&ct=result

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

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