Investment Warrants: cost basis and taxation

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    Recently purchased several thousand units in a SPAC. Each unit contains 1 share and 0.5 warrant. Currently all 3, i.e., units, shares and warrants, trade on NASDQ. The SPAC will merge with a company in the second quarter of 2021. I’m trying to determine what the cost basis is of the share and warrant if they are split out of the unit now, and what the tax consequences are for exercising the warrant in the future?
    The strike price for exercising the warrant is set at $11.50 and there will be a 5 year window in which to exercise the warrant. Regarding the tax consequences for exercising the warrant I’ve read conflicting information. One source states the there will be an immediate gain calculated by (merger company’s share price) – ($11.50 strike price + warrant cost basis), and the gain is treated as ordinary income not a capital gain. Another source states there is no taxable gain when exercising an investment warrant. If I exercise the warrants for new shares does the clock for capital gains rate start when I purchased the units or after the creation of a new share?
    Any clarification of this will be greatly appreciated.


    That`s a hard question enough. I can recommend you NerdWallet to learn some information about tax/investing and other operations. Its simple enough to use and you can also read some information about your

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