No. of Recommendations: 2
useful insight !
my understanding for the u.s. investor :
- as usual, dividends from BN will be taxed each year at a lower rate than capital GAINS; given one can utilize the foreign tax credit and the person is in a typical tax bracket.
- return OF capital lowers the cost basis until the stake in BNRE is only capital gains (or losses!) whenever sold. so this is a time deferral, but not guaranteed rate deferral (which of course are linked anyway).
so if BNRE does well and is never traded, could be great for taxes.
bottom line : possibly not worth the complexity and risk of future manipulations experienced by many brookfield subs.
