Lennar Corporation (LEN) — Split Off — $750 Upside
Current Price: $118.1
Offer Price: $125.6
Upside: 6.4% or $750 for odd-lot positions
Expiration date: November 7
This is a rather standard split-off case and I have covered a number of those over the years. As usual, I recommend checking my in-depth Analysis of Split-off Trading Strategies to have a better understanding of these types of situations, share price behavior, risks, and the possible trading strategies. The two latest transactions were CMI/ATMU (2024) and JNJ/KVUE (2023). So far, all of the split-offs proceeded on announced (or improved) terms and none were canceled. However, arbitrage on some of them did not generate the expected returns due to hedging costs/availability or unfavorable share price movements for unhedged positions.
Lennar, one of the largest homebuilders in the U.S., spun off its 80% stake in Millrose Properties (MRP), a land bank REIT, through an IPO earlier this year. Now, Lennar plans to divest the remaining 20% stake in MRP to LEN shareholders. Holders of LEN shares have an option to exchange their stock for MRP at a 6.38% premium on a dollar basis. The offer expires on November 7, although some brokers may have earlier cut-offs for participation.
Every $100 of LEN stock accepted in the tender will be exchanged for $106.38 of MRP stock, subject to an upper limit of 4.1367 MRP shares per LEN share. The upper limit is not currently in effect, but it’s close (at ~3.9x). The final exchange ratio will be determined on November 5, based on the VWAP prices of both stocks over the period of November 3–5. Odd-lot holders (accounts with 99 or less shares) will be accepted on a priority basis and won’t be prorated.
The key difference this time compared with the last two split-offs is that the majority (80%) of MRP outstanding shares have already been distributed to shareholders earlier this year, and the remaining divestment size is relatively small compared to the existing float. As a result, there is plenty of cheap borrow available, making the hedged bet much easier to set up. That said, borrow risk still exists and as the expiration date approaches, borrow could still tighten or even disappear.
In many past split-offs, the parent company still owned over 50% of the subsidiary. This created an unfavorable dynamic where the number of shares being distributed was significantly larger (often four to five times) than the number of subsidiary shares already trading on the market. As a result, the massive supply of new shares made borrowing the stock for a hedge either impossible or extremely expensive. From this perspective, the LEN/MRP split-off looks very favorable for a hedged trade.
Unhedged split-off bets have on average historically delivered slightly better returns (see here), but we are talking only about 6.4% spread and MRP’s price could easily move by more than that till investors get their LEN shares exchanged into MRP shares by mid-November.
Opening the arbitrage closer to expiration date or when the exchange ratio is fully set in stone is also an option, but there is a risk that the spread will disappear till then (this happened only for a number of split-offs out of 20 I have covered so far).
For SSI’s tracking portfolio purposes, I’ve set up a fully hedged position with the exchange ratio at the upper limit, as in many previous split-off cases the final exchange ratio was often set at the upper limit. If the final exchange ratio will end up at the upper limit, then the return from the hedged position established today would be $1100.
Both LEN and MRP are large, well-followed companies, so there’s not much to add on the valuation front. MRP is a real estate investment trust that owns and then sells and options land to homebuilders. There’s a VIC pitch from February 2025 that gives a good overview of the business. The stock has already reached the author’s target price of $30.6/share, which values the company at 0.88x TBV. About 95% of MRP’s revenue comes from Lennar, which gets land at very favorable terms. VIC author’s investment thesis was that MRP will eventually diversify to other, higher-margin clients.
LEN, meanwhile, is a $30bn market-cap asset-light homebuilder that’s trading at 1.6x TBV and 14x forward PE. Its closest peer, NVR, trades around 18x PE. There’s also a public VIC pitch on LEN from earlier this year that dives nicely into both the company’s business dynamics and its relationship with MRP. The author argues that LEN should be worth more than 2× its current price.
Both companies have already reported their Q3 results (MRP’s are still preliminary) and have paid their quarterly dividends.
Important points/risks to consider (similar to other split-offs):
- Upper limit. The transaction is subject to an upper limit of 4.1367 MRP shares per LEN share, which is currently not in effect. Because of this cap, the spread could disappear if, for example, LEN’s stock rises or MRP’s falls. The final ratio will be based on the average LEN price over the last three days divided by 0.94 times the average MRP price, subject to the upper limit cap.
- Odd-lots are exempt from proration. Holders of 99 shares or less will be exempt from proration.
- Oversubscription. The maximum amount of LEN shares that will be accepted in the tender is only 3%, a bit lower than the average for previous cases (around 5%). Nearly all of the previous split-offs have been heavily oversubscribed (by 10x-20x). It’s pretty much guaranteed that LEN/MRP transaction will also be oversubscribed, hence, this trade is applicable to odd-lot positions only.
- Borrow risk. MRP borrow might disappear and is likely to get more expensive. Some hedged positions might be forced to buy in at unfavorable prices (this has happened in a couple of previous split-offs).
- Unhedged trade is very risky. SSI analysis shows that on average unhedged split-off arbitrage results in higher returns – 13 out of 18 transactions had higher profits with unhedged positions. However, 6.4% spread can evaporate fast due to market volatility.
- Final exchange ratio and timing of the position opening. The final exchange ratio will be determined based on the VWAPs during the period November 3 to 5, so one might wait till then to enter the position. IB deadline for tendering is usually noon on the expiration date (November 7), but other brokers might have other deadlines. The final exchange ratio usually ends up at or close to the upper limit, and I would expect a similar outcome here.
- Risk of Odd-lot provision cancellation. This provision has never been canceled in a split-off transaction so far. The maximum amount of odd-lot shares participating in a split-off was close to 2m vs 8m of LEN shares that can potentially be accepted in this offer. At least theoretically, the risk of odd-lot cancellation remains, but it is very low.
- Minimum participation amount (likely to be irrelevant). The offer document vaguely mentions “Minimum Amount” of shares to be tendered, but does not define what this term means. Last year’s CMI/ATMU split-off had the minimum set at 50% of the full allotment. In any case, I expect the offer to be heavily oversubscribed and the minimum condition will become irrelevant.
Just a little incremental risk with the government shutdown:
“The Exchange Offer cannot be completed until the Registration Statement becomes effective. The SEC has announced that during the current U.S. federal government shutdown, the SEC will not declare registration statements effective. If the shutdown does not end by the anticipated November 7, 2025 expiration date, Lennar will either have to extend the expiration date or withdraw the Exchange Offer. If the shutdown is still in effect at midnight on October 31, 2025, Lennar will announce by 11:59 pm on October 31, 2025 whether it will (1) extend the Exchange Offer and, if so, the extended expiration date, or (2) terminate the Exchange Offer.”
What do we think of this “risk”? It seems more and more likely this could happen and at least cause a delay. LEN has had a nice jump since write-up but I worry that a delay will cause the price to fall. Any thoughts?
The way I see it, this risk is minimal, and Lennar will likely extend the expiration date if the shutdown continues through October 31. We could see a stock price decline if the shutdown lasts longer than anticipated. However, the decline would lock-in the upper limit ratio, which I guess isn’t bad if you’re hedging at upper limit. FWIW, Polymarket suggests there’s roughly a 50% chance the shutdown ends by November 15.
https://polymarket.com/event/will-the-government-shutdown-end-by-763
Shutdown almost sure beyond Oct 31 per polymarket. So, by this Friday night, LEN will extend or terminate tender.
@PharmaNoob
If they extend the expiration date but keep November 3–5 VWAP window (November 3–5) unchanged, then it’s fine.
However, if they change the VWAP window as well and announce it only after 3 Nov, then it can really mess up one’s hedging plan.
Thank you for the idea. Can someone please help me understand what I am missing here? As I understand it the final ratio will be based on the VWAP of both stocks in the 3 days between Nov 3rd and Nov 5th. Suppose I opened the hedged position today but the share price of LEN dropped from today’s USD 118 to 90 by the end of October while MRP stayed flat at around 31, I imagine the final ratio would be set at around 2.9 (ignoring the 6% discount for simplicity). So even with the hedged position, wouldn’t this result in a loss? Thanks
Yeah, I think the trade should be initiated during November 3–5 only, buying 33 shares of LEN on each of the three days.
Only most brokers won’t let you tender that late.
You are correct, there is a risk that exchange ratio might end up materially different from the upper limit. To avoid this risk, investor can initiate the arb on the valuation days (Nov 3-5) or even after the exchange ratio has been set in stone (Nov 6). At least Interactive Brokers has always to allowed to tender till noon on the expiration date.
I have discussed various strategies / scenarios in my split-off analysis article (http://ssi.wpdeveloper.lt/2020/06/analysis-of-different-split-off-trading-strategies/), where you can see the difference in payoffs if position is opened right after the announcement of the split-off versus waiting for the final exchange ratio. Historically the exchange ratio has almost always landed near or at the upper limit. But it might be different this time.
Thanks a lot everyone for the helpful responses.
Do you know whether you can trade this in two brokerage accounts @ different brokers?
Do you know whether – having a joint account in IBKR – the owners can trade this Exchange Offer separately with the odd-lot working twice for them?
Thanks and regards
As I understand, if accounts are under the same name, they will get aggregated across different brokers.
My understanding was that while aggregation across different brokers is always a possibility, that has not happened yet. Does anyone know if that still holds or are different brokers held in the same name now being aggregated?
Whar was the source for your current understanding? Genuinely curious.
Apparently it all depends on what kind of account you buy the shares in. Just found this golden comment from an older SSI odd-lot case that explains it. I suppose it should apply to all odd-lot cases:
“In the words of Peter Parker at the beginning of “Into The Spider-Verse”: All right, let’s do this one last time.
99 shares per broker. That is spread across all your accounts. Brokers track your aggregate holdings by Social Security Number, but they don’t share Security Security Numbers with other brokers, that’d be against the law. Taxable account, brokerage account, revocable trusts, all share the same SSN = aggregated.
For example, you buy 99 shares in your Roth IRA. You’re golden.
Example 2: you buy 99 shares in your taxable account and 99 shares in your Roth IRA, that’s 198 total shares, no longer an odd-lot, you’re screwed, DO NOT DO THAT.
Example 3: you buy 99 shares at Interactive Brokers, and 99 share at Charles Schwab. You do the tender at both, you’re golden. Keep your mouth shut and don’t let Broker A know you own the same shares at Broker B. If you do, you deserve what you have coming to you.”
http://ssi.wpdeveloper.lt/2023/11/quick-pitch-docebo-dcbo/#comment-18125
Huh, that comment looks oddly familiar…. 🙂
Does anyone have experience with Schwab on this type of trade? Are you able to tender up till the end like with IBKR? Would love to follow Example 3 if Schwab also allows it.
@oversold970 – I think Schwab’s tender instructions deadline is 11/19.
@dt
Although odd-lot ideas tend to be the highest conviction ones, I think they should be kept out of the tracking portfolio.
Most odd-lot ideas have very limited capacity, and when equal-weighted with other ideas the tracking portfolio becomes less realistic in reflecting the performance of more typical high conviction SSI ideas.
I just dont see a way this would work without a hedged position and the exchange ratio set in stone. Lets assume youre shorting the upper limit amount of shares of mrp and the exchange ratio comes out to be 3.9. Then the amount of your of your shorted shares that you had in excess will eat away all of your profits, assuming the prices of mrp and len are fixed.
Nice pop on the LEN share price today (absolute and relative to MRP).
Tracker for exchange ratios etc is here: https://www.envisionreports.com/lennarexchange/2025/lennarexchangeoct10v4/index.html?voting=true
Are people at Envision Reports not working? I see the data is still only as of October 10th, 2025.
Use the generic link: https://www.envisionreports.com/lennarexchange/
OK, I read the background document, but I’m still confused why there’s complexity in these x% above the parent price offers. What’s wrong with this naive strategy: X days before the ratio date, where X is the brokerage limit (non-IB), buy the odd lots and tender them. Then every VWAP day, short 33 MRP if it makes sense given the ratio for that day. If the ratio is above, don’t short.
What am I missing?
Do you know when is the IB deadline?
IB has not added this corporate action to its database yet, so the cut-off time for IB clients still has not been announced. But usually it is at noon on the tender expiration date.
I received the notification of the corporate action in IBRK ~12h ago.
https://seekingalpha.com/pr/20288687-lennar-announces-extension-of-expiration-date-of-exchange-offer
Extension of expiration: 1 week more
will they change ” November 3, 4 and 5, 2025″ also?
They say: “All other terms, provisions and conditions of the Exchange Offer will remain in full force and effect”, so I guess it includes the valuation days (Nov 3-5)
New averaging days are November 10-12 http://www.envisionreports.com/lennarexchange
It’s changes to November 10,11,12 https://www.envisionreports.com/lennarexchange/2025/lennarexchangeoct31v2/index.html?voting=true
How are folks constructing the hedge here? Assuming the current price on Nov 3 – 5, if one buys 99 shares of LEN it’s $12,253. For the other leg, are you shorting the same dollar value of MRP (~380 shares), the expected dollar value from the tender ($106.38*$12,253 = ~405 shares), or something else?
I’ve set up a fully hedged position with the exchange ratio at the upper limit (4.1367x MRP per each LEN share), so the short leg is 410 shares. Historically, the final exchange ratio has very often been set at or close to the upper limit. So far, the ratio has remained close to the upper limit in this case too. That, of course, can still change.
How would fractional shares be treated?
At Interactive Brokers sometimes we received fractional shares as merger consideration even though a deal didn’t pay fractional shares. Undesirable because one has to pay a commission to get rid of the shares.
Maybe shareholding of all IB customers are aggregated when “fractional shares” are determined by the processer?
From the latest filing re fractional shares
“Fractional shares of Millrose Class A Common Stock will not be distributed in the Exchange Offer. Computershare Trust Company, N.A., the exchange agent, acting as agent for the tendering Lennar stockholders, will aggregate any fractional shares that would otherwise have been required to be distributed and cause them to be sold in the open market for the accounts of the stockholders.”
Great, thanks dt.
Further extension of expiration to November 21, 2025
https://investors.lennar.com/press-releases/2025/11-07-2025-231723006
The vwap averaging days haven’t yet been changed, but given previous change, it seems likely they will also be pushed back, right?
Yeah, the valuation days have been pushed to November 17–19.
https://www.bamsec.com/filing/119312525274584?cik=920760
By the way, another extension to the tender expiration date seems unlikely. The Senate passed a funding package yesterday, and it is likely to be supported by the House of Representatives in the coming days, which will fund the government through the end of January.
https://www.texastribune.org/2025/11/10/cornyn-cruz-funding-deal-end-government-shutdown/
Correct
https://www.envisionreports.com/lennarexchange/2025/lennarexchangenov10/index.html?voting=true
Hi, I have setup a fully hedged position as dt was mentioning, but using two different accounts. My thinking for the execution is to sell MRP as soon as I get them in the first account. Now for the short position I have on the other acccount I am thinking that it may be a good idea to hold a little, as everyone will be selling MRP on the open, right? Or is this two account setup just dangerous?
two accounts is fine…they’re all your accounts, right? If you make money in one on the hedge and lose it in the other it doesn’t matter on your total personal balance sheet. But if you stay short MRP then you’re of course unhedged in the other direction so it’s unclear what you’re accomplishing. I’d close the short at the same time you sell the MRP.
It depends on how quickly you can sell. If the trade is setup in the same account, the process is automatic, so the risk is lower. My previous analysis of split-off strategies suggests that the best results on average are from exiting right after receiving the new shares. Still, it’s always a case-by-case situation, and this one could play out differently.
http://ssi.wpdeveloper.lt/2020/06/analysis-of-different-split-off-trading-strategies/
Thanks, great statistics, and that answers my question
Would be great if the 2020 post could be updated to include 5 more years of data, to keep it as the internet’s most comprehensive summary of split-off statistics :-D.
The main conclusions most likely won’t change.
I just got the update from IBKR that it’s been extended again.
For those initiating the hedged trade across the averaging days (e.g. 33 LEN per day) , does it make sense to initially put on each part of short MRP leg at the upper limit and then rebalance the next day once the indicative exchange ratio is provided at close? Or is there a good quick way to estimate the VWAP and put on based on that exchange ratio estimate before the close of trading on each averaging day?
I see the VWAP indicator in IBKR, though I suppose one could also wait to initiate each +33 LEN / [-136] MRP leg of the trade at the start of the next trading day when the ratio is set from the prior close.
Where do you check VWAP in IBKR? Are you using TWS?
I found it on the top toolbar using IBKR Desktop under the indicators icon. I also found it on mobile with the little gear settings icon below the chart and then scroll down to indicators and search for vwap.
I think it’s only in the desktop program and not on either of the mobile apps 🙁
I don’t understand the rationale behind buying 33 shares on multiple days. The terms don’t change regardless of when you buy LEN.
But yes, I always short at the upper limit, then cover any remaining shares once the ratio is set. Hasn’t burned me yet . . . .
We have to spread the trade over three days exactly because the terms don’t change regardless of when we buy/sell LEN/MRP.
In other words, the terms don’t care about our costs, and if our buy/sell costs don’t mimic as closely as possible how the terms are calculated (i.e., VWAP) we unnecessarily introduce risks to this arbitrage trade.
You don’t have to, and I don’t, but I think they’re trying to transact such that they hit the terms exactly.
I usually just put something on that’s close enough and then tweak it again later or just let it ride.
I can imagine you would care immensely if you were doing shenanigans with multiple accounts and had more than just 99 shares exposure 🙁
What is going on with both LEN and MRP, down about 6% today?
Welp…this trade just got sh83canned today if not hedged. That sucks.
Where are you seeing that? This filing from today indicates otherwise.
https://www.bamsec.com/filing/119312525284746?cik=920760
Never mind. I misunderstood your comment, thinking you were saying the tender was cancelled.
why does the website (https://www.envisionreports.com/lennarexchange/2025/lennarexchangenov17/index.html?voting=true) say today (Nov 17)’s VWAP for LEN is $114.55?
The stock opened at around $120 today, and declined all day to close at $114. I would’ve expected VWAP to be somewhere around $117? What am I missing?
VWAP is volume-weighted. It had a big surge in volume at the end of the day yesterday.
Not every print has the same volume. A bunch of stuff in the open or closed can affect it.
Other than driving myself home and getting in front of a real computer and using TWS, is there any (free, public) source for the day’s intraday VWAP?
You can try Webull and seeking alpha (I have the paid version so not sure if free version has vwap). But the numbers can these services can be very different from the Bloomberg number because apparently Bloomberg data includes end of day auction data and dark pools.
Good news. LEN anticipates no further extensions to the tender expiration date (November 21). MRP has requested “acceleration of the effectiveness of the registration statement” with the SEC, and the registration statement is expected to become effective before the expiration date.
The exchange ratio remains close to the upper limit. On November 17 (the first VWAP calculation day), it was at 4.0894. Yesterday (the second VWAP day), it was at 4.1327. Today is the last VWAP calculation day, and the final ratio should be announced tomorrow.
https://www.bamsec.com/filing/119312525286132?cik=920760
I think these are the final calcs based on their website:
Date:
11/19/2025
Lennar Class A Common Stock Daily VWAP:
$ 115.1911
Millrose Class A Common Stock Daily VWAP:
$ 29.2839
Indicative Exchange Ratio:
4.1367
Upper Limit:
4.1367
Upper Limit in Effect:
Yes
How long is the capital tied up? i.e. if I buy shares of LEN, can I dump them day after the tender expiration date and use the capital while I wait for the MRP shares, then dump those upon them showing up in my account? Does it work similar to a dividend in that I only have to be a holder on ex-date?
At Interactive Brokers, for instance, the LEN shares are locked in place until the new shares MRP are delivered. Usually a week or less.
So you’re buying power will not reset until it’s finished…
The new shares are exchanged for the old ones, so it works nothing like the ex dividend date that you’re describing.
Ah….no. If you have tendered your shares, they are locked up in your brokerage account until the exchange occurs and you get the new shares. You can’t do *anything* with them. They’re gone, as far as you’re concerned. It’s often a weekish until you get the new, tradable shares in your account and you can do anything you want with those.
yes…..banxa was the same situation and worse than this…….if they failed their buyout you will lose much money…….at Lenna case, at least you get shares and it has potential…..
I don’t have accurate VWAP data, but it looks like it’s gonna go out of the upper limit if nothing substantial happens this afternoon.
Everyone’s probably running their own, but this is what I’ve got. VWAP data from the official site plus estimates from Webull
https://docs.google.com/spreadsheets/d/1E4Ir9W4frZNUF0BD_xh2UhfT1FcR_tFjNhIFbaG26qY/edit?usp=drivesdk
Long/short positions at IB don’t perfectly finance each other, right? Due to the way their interest rate tiers work?
Never mind. It’s the interest for the borrow.
Was the registration declared effective by the SEC? The last update from Lennar, on the 18th, said they expect it to be completed by the 21st, but no update since then
Another nice pop on the share price today which should take the 6% gain to closer to 11% for those unhedged, assuming the price holds
The tender offer was completed last week, and preliminary results have just been released. In line with most previous split-offs, the final exchange ratio was set at the upper limit of 4.1367x. The offer was substantially oversubscribed, with 92m shares of Lennar tendered versus 8m accepted. Roughly 0.8m odd-lot shares were tendered, which is around average compared with historical cases. MRP shares should start hitting accounts in about a week.
https://investors.lennar.com/press-releases/2025/11-24-2025-130134330
So about 7,866 accounts participated in the odd-lot arbitrage. Is that a normal level as well? I had expected much more.
I also expected a higher number, mainly because the general sense has been that odd-lots have become more popular in recent years. But yes, this is roughly in line with historical averages. The number of odd-lot accounts in the last two major split-offs (JNJ/KVUE and CMI/ATMU) was around 66k and 10k, assuming all of them owned 99 shares. JNJ/KVUE was a standout because of much larger size of the companies involved.
For older cases, you can check the second-to-last graph in the split-off analysis. Most of them had the odd-lot threshold set at 99 shares.
http://ssi.wpdeveloper.lt/2020/06/analysis-of-different-split-off-trading-strategies/
For those who’ve tendered your 99 shares of $LEN (and who haven’t shorted $MRP yet):
Historically when is the best time to go short $MRP?
My going assumption is there is “selling pressure” immediately upon the $MRP shares being delivered into everyone’s (for instance, Fidelity/IBKR/Schwab) accounts, because many “retail odd-lot” folks will sell immediately whenever they receive their $MRP.
Best time to short is after the final ratio comes out. That way you lock in the spread and don’t get dragged thru a few wks of random volatility while waiting for the shares to show up. Once the new shares hit your account, the hedge will auto close. If you short later, you’re just taking on extra volatility risk.
Or do you mean selling the MRP you get and shorting it straight away to play some post exchange dump? I don’t really remember any big drops from that. Some of the recent split-offs even went up if i remember correctly.
A post exchange dump is what I am referring to. However, there are only 8,000 odd lot holders. Perhaps the others who got the shares actually want to hold them (as opposed to the odd lot holders who I assume will dump them ASAP/same-day as received, if they didn’t short beforehand).
I’m relatively new at this, so you (or DT) would know if there a big drops ever on the day that we receive the shares in our accounts? Thanks.
I don’t remember any recent drops either. Historical data also suggests that closing an unhedged position one week after receiving the shares versus immediately made little difference in returns (~2.5% lower on average after 1 week). And on average, the stock actually rebounded in week two.
I always hedge at least some of it. My portfolio is already as long as I want to be, so I wanted it essentially be market neutral. But to the extent I don’t know the final ratio, I don’t really ever get it exactly right and don’t really try,
KVUE dropped after the exchange. I think I received shares on Aug 23 2023 at $23.62 and it went steadily down to the 18s in October with no significant rebound.
Odd-lotters who shorted MRP as a hedge would then be buying it back, thus offsetting at least some (most?) of the odd-lotters selling MRP upon receiving the shares.
If you hedged the position, you don’t need to buy MRP back. Upon conversion, the MRP shares simply offset the short position.
That is true, although in my case they were in different brokerage accounts, so I did have to buy it back. I was addressing the question above about “selling pressure”, and that it would be partially offset by short covering, for those that hedged.
but you had to *sell* the shares you received. So your closing of the short added 0 buying pressure whatsoever.
That is, unless you closed the short and held on to your exchanged shares, making you now long MRP. Doubt that’s what you did.
FWIW, there are a lot of 409-shares MRP trades on today’s ticker tape.
MRP shares appeared in Interactive Brokers accounts yesterday. Another split-off in the bag.
While this one took a bit longer due to government shutdown, it’s still a nice $1100 profit on the hedged position.
Really enjoyed participating in this one. Thanks again
Pretty good one. Somehow ended up making 900 on it. Bought early and slightly underhedged. Dumb luck.
thx!!!
Thanks, dt!
I tendered 99 of LEN in both IB and Questrade (a Canadian broker). The exchange in IB went well but Questrade deduct 15% withholding tax (around $1900) for non US residence.
When I called Questrade for an explanation, they said the payment from LEN was considered as “divident” by IRS, in order to get the money back I need to fill out a form “Section 302 – Certification of Treatment of Tender Payment Form”.
Did anyone using Questrade have the same problem?
Yes, they would email you a PDF Section 302 which you would complete and upload, and they would refund you the withholding taxes. At least that’s what happened for me in a few situations before.
Did they tell you that you would receive the Section 302 in email?
Thank you for your information.
Yes, I received the PDF form and I have a question, the Section 302 instruction document stated:
“When calculating the number of shares of Acquirer stock that you own for purposes of Part A or B, you must include all of the shares you hold directly or indirectly through any financial institution or otherwise. Please note that you must provide a separate certification to each financial institution where you hold shares of the Acquirer.”
Since I have 99 shares in both IB and Questrade, should I put 198 in the shares I owned and upload 2 forms in both IB and Questrade? It seems strange to me, and the payment in IB does not involve any withholding tax.
Put 99 as what you do with IB does not concern questrade.
Did you only receive a Section 302 form after you called? Which option did you chose? I’m assuming “Complete Termination of Interest”?
I tried to offer 99 shares in the tender at two different brokerages. Both were treated as odd lots. IBKR was a good choice, Saxo less so, because they only managed to settle the transaction today, two weeks after the deadline. But both worked.
Did Saxo apply WHT to your Tender Proceeds ? I’ve usually had to fill out a form & wait a couple of weeks to get it back.
No. They didn’t ask for anything, they just worked on it for 2 weeks. I tried to inquire, but they didn’t give me any meaningful information.
OK, Thanks for the response.