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#1 Posted : Tuesday, September 1, 2020 2:05:12 AM(UTC)

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On August 3, 2020, Occidental Petroleum (OXY) distributed warrants to shareholders of record on July 24, 2020. Shareholders received .125 warrants for each OXY share owned. According to an 8-K filed with the SEC, the warrants were designed to be a taxable distribution for US shareholders.
Treat this as a cash dividend followed by a buy of the warrants. The amount of the dividend should be the market value of the warrants on the distribution date.
The warrants have the ticker symbol OXY.WS. The warrants opened at $5.04 on 8/3/2020.
Total warrants received = .125 x (OXY shares owned).
Market value of warrants = .125 x (OXY shares owned) x 5.04.
Enter a Cash Distribution for the value of the warrants, include the value of fractional warrants if appropriate. Dare the distribution 8/3/2020.
Enter a buy transaction dated 8/3/2020 for .125 x (OXY shares owned) shares of OXY.WS. Include fractional portion in the buy transaction. Total cost of the warrants should be the value of the cash distribution calculated above.
Finally, if you entered a buy that included fractional warrants you will need to enter a sell transaction for the fractional portion. Date this one day after the buy of OXY.WS or on the day the cash from the sale was deposited into your account. Use the cash-in-lieu amount reported by your broker as the sale proceeds.
Two important notes:
1. While the 8-K stated the ticker of the warrants is OXY.WS please note I was not able to find a quote using this ticker. Yahoo used OXT-WT while BigCharts used OXY.WT. You may need to play with the quote symbol to get downloaded prices for the warrants.
2. The 8-K stated that under certain circumstances the warrants could be considered a tax-free distribution. The document did not elaborate on what those circumstances might be. Be aware that the tax consequences may change.

Russell Malley

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