No. of Recommendations: 0
Berkshire could do what some ETFs & others have done.
Have an optional distribution, where your options are to take it in cash or in shares. The cash would be taxable and the shares are not.
I don't know the legal complexities, but that's how it works out. Maybe as some sort of mini-split?
I was wondering about such a structure, too. Seems like an ingenious way of solving the problem of optimizing the distribution for different investors' circumstances, and something Buffett would probably be thinking about if he ever decided it was time to pull the dividend trigger.
From a brief look, it looks like share distributions, at least in Canada and the USA, would indeed be tax-free, but I am not an accountant.
Do you have any concrete example of companies that have done this? I have never heard of it being done, but it would make a lot of sense for all companies, not just Berkshire, so if it works, it seems surprising that it would be so rare.
