Avoid thoughtless posting - imagine a post that you would find inspiring from others, then aim for that standard yourself. In this way the board will blossom.
- Manlobbi
Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
No. of Recommendations: 18
Interesting commentary which I read on Kingswell. The 15% Corporate AMT seemed a bit ambiguous initially but it sounds very real & influencing our behavior.
Kingswell excerpt:
“Warren also offered an interesting explanation for some of Berkshire’s recent stock sales. “Berkshire is subject to the 15% Corporate Alternative Minimum Tax,” he said, “and if they don’t pay an effective tax rate more than 15% in cash taxes over a three-year running period, they will be taxed on their unrealized gains. And, basically, what they’re doing is realizing gains to ensure that they get over that hump. That, in my opinion, is the main reason why we see them selling off Apple and Bank of America.”
No. of Recommendations: 3
And, basically, what they’re doing is realizing gains to ensure that they get over that hump. That, in my opinion, is the main reason why we see them selling off Apple and Bank of America.”
If this was it, couldn't they just sell the stock to realize the gain and then immediately rebuy it to keep their position? I think that is the opposite of a wash sale. Wash sales are prohibited because they reduce the current taxes paid, whereas this inverse wash sale is so we can move up the deferred taxes until now.
So if they are selling positions and they stay sold, I'm pretty sure that proves it is not just to rejigger AMT vs regular corporate taxation.
R:
No. of Recommendations: 5
what they’re doing is realizing gains to ensure that they get over that hump. That, in my opinion, is the main reason why we see them selling off Apple and Bank of America.”
If this was it, couldn't they just sell the stock to realize the gain and then immediately rebuy it to keep their position? I think that is the opposite of a wash sale. Wash sales are prohibited because they reduce the current taxes paid, whereas this inverse wash sale is so we can move up the deferred taxes until now.
So if they are selling positions and they stay sold, I'm pretty sure that proves it is not just to rejigger AMT vs regular corporate taxation.
Both can be true. They may think these stocks are a bit overpriced, but it is sometimes better to keep a moderately overpriced stock and postpone taxes definitely. If they are stuck with alternative minimum taxes in any case, that argument disappears, and they sell. If they thought those shares were moderately overpriced before the sale, they would only repurchase them if the price came down a bit, first.
Just a thought, dtb
