Tara Gold Resources (fka TRGD)

[Sam Dan]

Posted by HHAPPY on another site

Important information for TRGD shareholders who will be receiving FRMA shares as a dividend on Feb 5,2015.

American shareholders will have to pay a capital gains tax on the dividend. The first tranche
did not attract a capital gains tax until the TARM shares were sold because at that time TRGD owned more than 80 % of the shares of TARM. Now TRGD owns approx. 40% of FRMA so US
Federal Capital gains tax must be paid.
Canadian shareholders did have to pay capital gains on the first tranche of the TARM dividend even though they had not sold the TARM shares.
This time there is an exemption available to forgo the tax until the FRMA shares are sold. I have provided management of FRMA with the attached information to obtain the exemption. I would urge all Canadians who will be receiving the dividend of FRMA shares to write or call management to request they apply for the exemption . There is a time limit on making an appeal- I believe it is 6 months but not sure.

Below is my information to FMRA management after first tranche

I have been successful in contacting Canadian Revenue Agency [CRA] re Canadian shareholders of TRGD/TARM and the tax liability of the TARM dividend to TRGD Canadian shareholders.
The first tranche received by Canadian shareholders of TRGD of the TARM shares attracted a T5 status. ie this transaction resulted in a tax liability even though the shares were NOT sold.
If TRGD/FRMA MANAGEMENT SUCCESSFULLY APPLIES FOR AN EXEMPTION FROM THIS “FOREIGN LIABILITY” SUBSEQUENT DIVIDENDS PROMISED BY MANAGEMENT WOULD NOT ATTRACT TAX UNTIL THE FRMA SHARES ARE SOLD !!
I have forwarded this information to management and hope they act quickly to file and achieve exemption. CSA said this is a routine transaction.
Go to http://laws-lois.justice.gc.ca/eng/acts/I-3.3/page-121.html#h-23 from the Canadian Income Tax Act.
It took some time and patience to obtain this info but CSA was very helpful !!
Would suggest you contact your accountant to follow this matter.
Remember when you sell the FRMA shares it will attract a tax. Not sure if part Dividend Income plus Capital Gain.