Talk with your tax advisor on everything I say below.
The cost basis is the same before and after the conversion.
Selling MDMN to buy AUMC or vice versa is questionable regarding wash sale rules. Your account must advise, but they are essentially as the same asset in the mind of the IRS.
After the conversion there is only one asset (which is why it’s too late to take your tax loss and buy the other.)
Anyone risking trying to take advantage of the tax loss (assuming they are not worrying about 30 day wash sale) has to be very careful of the lack of liquidity in AUMC.
Correct. Or just sell and buy back in 30 days. CDCH is admittedly thin. But if you are worried about not having full exposure b/c the next piece of news is going to take the stock significantly higher, I would simply point to the last piece of news which was very positive and had almost no impact on the share prices. It’s going to take a lot of time and progress, IMO, for this stock to start moving. It took a lot of time to destroy the capital structure and find a legitimate partner. Ying and Yang. For those thinking in weeks and months I would encourage you to start thinking in years.
Refer to Brecciaboys’ typical “development cycle” and the 1 in a million references (only 10 years early). We are in the early stages of the cycle on the assets with the most potential.
Totally agree with consulting with your tax advisor but there’s no way MDMN and CDCH (two random penny stocks) will be considered the same asset. If the IRS or any other regulatory body had this company on their radar screen Les Price would be in jail.
So to keep your mdmn loses in tact, one would have to sell their mdmn shares before the conversion. Then you could buy cdchd anytime before the conversion, or wait until after the conversion, and buy aumc. That could be quite risky. So for now for every million shares of mdmn sold you could get “around” $4,000. And with that you could buy “around” 4,500 shares of cdchd. Another option would be to sell mdmn and wait 30 days to buy back mdmn…Do I have that right?
I suggest looking for a primer on capital gains and losses before taking any action. If you don’t really understand what you’re doing and are good at trading, you’ll likely end up losing on any transaction
The time to execute John’s strategy was over the last year, not now, imo.
Also, given that the reverse is done, the optimal direction for sure is to sell CDCH to buy MDMN (with the risk being that MDMN is able to actually deliver on their conversion at the ration of 0.00558 or better.) That is where the premium is. Going the other way direction doesn’t work because CDCH is too illiquid.
So I am down $33,000 on my MDMN holdings. They are worth about $1,300 now. Can I sell it all now, take the loss, and somehow make that a positive on my upcoming taxes?
any other gains out side of this investment if so you can offset them with a loss here. Me I havent traded in years so waiting for this turd to turn around and make something on this decade long ass tear
Even if you don’t have offsetting capital gains, you can take $3000 loss off of regular income each year until you use up all your capital loss. But only if the loss is in a taxable account. Can’t use a loss for tax purposes in an IRA or Roth.
It says something about a system when a group of intelligent grown men and women have to have a pow wow to try and figure out the best way to deal with their own finances.
As for whether to buy or sell now, I think I’m in a slightly different situation since I was far dumber than most of you over the years, although for me it may actually be simpler. I wait for MDMN to become AUMC. The cost of my MDMN shares becomes the basis of my AUMC shares and I wait to see what the company does. If it looks good, I average down to a level where there are hopes of recovering or even profiting from the investment. Otherwise I wait to recoup what I can and move on having learned the most expensive/valuable lesson of my financial life.
For those who can’t read it, there is a quote by the CEO of Hochschild. Rough translation says:
We have signed an agreement with them to explore the Dos Marias project. It seems to us an attractive project and with interesting geological potential affirm.
Another point to put out there is Auryn and friends own shares of MDMN. I don’t t think they’re too worried selling MDMN to buy AUMC (CDCHD) or vice versa.
“Masglas Peru subscribed the agreement through the company Auryn Mining. Maurizio Cordova, president and general manager of Auryn Mining, a subsidiary of Masglas, noted that the project is in the early stages of exploration and that the short-term objective is that drilling in Dos Marias are made in early 2019”
May 16, 2016 PR:
“AURYN Mining Chile SpA (“AURYN” or “the Company” or “AMC”) is pleased to announce that our parent company, MASGLAS Limited, has purchased 218,763,318 shares of the common stock of Medinah Minerals, Inc” [1]
“Masglas Limited” has been mentioned many times in the past including now on Cerro’s / Auryn Mining Corp’s web site under Maurizio’s bio: “Mr. Cordova is the founder of MASGLAS Limited and AURYN Mining Chile, SpA, companies established in Chile to capitalize on the downturn in commodities”
Masglas Peru and Masglas Limited would appear to be related corporate entities, one formed in Peru and the other in Chile. Exactly how they are related has not been made clear. But Masglas Peru is the one in the process of ‘going public’ on the Canadian Toronto Venture exchange via the RTO with Western Troy Capital.
Obviously Masglas / Auryn / Maurizio is at this point interested in having the Masglas Peru name associated with Hochschild and the ADL Dos Marias project. Undoubtedly as time goes on we’ll hear more about the public company names and less about the private company names.
I’m not hung up on some of the technical details of the article. It is not all factually correct. However, some here were looking for confirmation from Hochschild. Well there it is, a direct quote from their CEO for the article.
Corporate structure is beginning to look very complex. Have I ever mentioned circular corporate structure? (see post #28 - 2016 Q3) It seems MASGLAS may have a number of subsidiaries. MASGLAS is building a behemoth of a corporate structure. The following reference may explain in part what has been happening:
Distinction Between Subsidiary and Wholly Owned Subsidiary
According to section 4 of the Companies Act, a company shall be deemed to be a subsidiary of another, if and only if:
(a) that other controls the compositions of its Board of directors; or
(b) that other holds more than half in nominal value of its equity share capital (where a company had preference share holders, before commencement of the Companies Act,1956, enjoying voting rights with that of equity shareholder, for the purpose of control, holding company should enjoy more than half of the total voting power) [1] ; or
(c) the first-mentioned company is a subsidiary of any company which is that other’s subsidiary.
MASGLAS would like to have exposure to the Latin American exchanges. It may be accomplishing this via going public on the Canadian Toronto Venture exchange via the RTO with Western Troy Capital. We should see if this happens sometime in October.
