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Marketable Equity Securities

9 Months Ended

Sep. 30, 2017

3. Marketable Equity Securities

Solitario's investments in marketable equity securities are classified as available-for-sale and are carried at fair value, which is based upon quoted prices of the securities owned. The cost of marketable equity securities sold is determined by the specific identification method. Changes in market value are recorded in accumulated other comprehensive income or loss within shareholders' equity, unless a decline in market value is considered other than temporary, in which case the decline is recognized as a loss in the consolidated statement of operations.

The following tables summarize Solitario’s marketable equity securities and accumulated other comprehensive income related to its marketable equity securities:

(in thousands)	September 30, 2017	December 31, 2016
Marketable equity securities at fair value	$2,819	$1,339
Cost	1,714	274
Accumulated other comprehensive income for unrealized holding gains	1,105	1,065
Deferred taxes on accumulated other comprehensive income for unrealized holding gains	(368)	(353)
Accumulated other comprehensive income	$737	$ 712

The following table represents changes in marketable equity securities.

(in thousands)	Three months ended September 30,		Nine months ended September 30,
	2017	2016	2017	2016
Gross cash proceeds	$ 407	$ 16	$ 666	$ 56
Cost	50	6	88	16
Gross gain on sale included in earnings during the period	357	10	578	40
Deferred taxes on gross gain on sale included in earnings	(132)	(4)	(214)	(15)
Reclassification adjustment to unrealized gain in other comprehensive income for net gains included in earnings	(225)	(6)	(364)	(25)
Gross unrealized holding (loss) gain arising during the period included in other comprehensive loss	157	83	618	753
Deferred taxes on unrealized holding (loss) gain included in other comprehensive loss	(58)	(31)	(229)	(279)
Net unrealized holding (loss) gain	99	52	389	474
Other comprehensive income (loss) from marketable equity securities	$(126)	$46	$25	$449

During the three and nine months ended September 30, 2017, Solitario sold 2,000,000 and 3,480,000, respectively, Vendetta common shares, for cash proceeds of $407,000 and $666,000. In addition, during the three and nine months ended September 30, 2017, Solitario exercised Vendetta Warrants, discussed below in Note 4, “Other assets” and received 5,000,000 and 7,240,000, respectively, common shares of Vendetta. Solitario transferred the fair value of the Vendetta Warrants on the date of exercise of $642,000 and $949,000, respectively, along with the cash paid to exercise the Vendetta Warrants of $411,000 and $578,000, respectively, to marketable equity securities as the cost of the 5,000,000 and 7,240,000 common shares of Vendetta acquired, as discussed below in Note 4, “Other Assets.”