Buffett/Berkshire - general news

[Luckyciaran]

On 4/21/2025 at 5:52 PM, bizaro86 said:

Does anyone have an opinion on whether the CDR would be a US situs asset for US estate tax purposes? I'm a Canadian and am wanting to make sure I stay under the limit. If this doesn't count it might be worth it for non-registered BRK shares. Otherwise I don't see much if any advantage...

I want to point out there's  a 50 basis point yearly currency fee. That's how cibc makes it's money. 

 

As far as a your question this is what I found. Hope it helps:

 

No, Canadian Depositary Receipts (CDRs) like CIBC’s Berkshire Hathaway CDR are not considered U.S. situs assets.

 

Here’s why that matters:

 

U.S. situs assets (e.g. U.S. stocks directly held by non-U.S. persons) are generally subject to U.S. estate tax if their value exceeds $60,000 USD.

 

CDRs are traded on the NEO Exchange in Canada and structured by a Canadian financial institution (CIBC). Legally, you're not holding the U.S. shares directly—CIBC is.

 

For Canadian residents, this avoids U.S. estate tax exposure, and CDRs are treated as Canadian securities from a tax and reporting standpoint.

 

 

So if you're holding something like BERK.B CDR, you get synthetic exposure to Berkshire Hathaway without triggering U.S. situs tax concerns.

 

 

 

 

 

Edited April 23, 2025 by Luckyciaran

[bizaro86]

Thanks! 50 bps is a big price to pay to Canadianize those assets. I'm young enough that it might actually be cheaper to pay USA estate taxes than have 50 bps of fees compound for 4+ decades (or maybe 5+ if I can channel that Berkshire longevity...)

[KCLarkin]

14 hours ago, Luckyciaran said:

I want to point out there's  a 50 basis point yearly currency fee. That's how cibc makes it's money. 

 

As far as a your question this is what I found. Hope it helps:

 

No, Canadian Depositary Receipts (CDRs) like CIBC’s Berkshire Hathaway CDR are not considered U.S. situs assets.

 

Here’s why that matters:

 

U.S. situs assets (e.g. U.S. stocks directly held by non-U.S. persons) are generally subject to U.S. estate tax if their value exceeds $60,000 USD.

 

CDRs are traded on the NEO Exchange in Canada and structured by a Canadian financial institution (CIBC). Legally, you're not holding the U.S. shares directly—CIBC is.

 

For Canadian residents, this avoids U.S. estate tax exposure, and CDRs are treated as Canadian securities from a tax and reporting standpoint.

 

 

So if you're holding something like BERK.B CDR, you get synthetic exposure to Berkshire Hathaway without triggering U.S. situs tax concerns.

 

 

 

 

 

Do you have a source on this? I can see this being true based on how they are setup, but this doesn't seem consistent with how US-listed ADRs are treated. Is there a difference in structure?

 

ADRs are treated as look-through to the domicile of the underlying. Why wouldn't that be true for the CDRs?

[Xerxes]

23 hours ago, Luckyciaran said:

I want to point out there's  a 50 basis point yearly currency fee. That's how cibc makes it's money. 

 

As far as a your question this is what I found. Hope it helps:

 

No, Canadian Depositary Receipts (CDRs) like CIBC’s Berkshire Hathaway CDR are not considered U.S. situs assets.

 

Here’s why that matters:

 

U.S. situs assets (e.g. U.S. stocks directly held by non-U.S. persons) are generally subject to U.S. estate tax if their value exceeds $60,000 USD.

 

CDRs are traded on the NEO Exchange in Canada and structured by a Canadian financial institution (CIBC). Legally, you're not holding the U.S. shares directly—CIBC is.

 

For Canadian residents, this avoids U.S. estate tax exposure, and CDRs are treated as Canadian securities from a tax and reporting standpoint.

 

 

So if you're holding something like BERK.B CDR, you get synthetic exposure to Berkshire Hathaway without triggering U.S. situs tax concerns.

 

 

 

 

 

 

@bizaro86

 

I have never heard of “estate tax” for non-US person. Is that for dividend or capital gain ? There is already a structure place via withholding tax for dividends. So that leaves capital gain

 

I hold all my U.S. holdings in RRSP. 

[bizaro86]

3 hours ago, Xerxes said:

 

@bizaro86

 

I have never heard of “estate tax” for non-US person. Is that for dividend or capital gain ? There is already a structure place via withholding tax for dividends. So that leaves capital gain

 

I hold all my U.S. holdings in RRSP. 

 

Canada doesn't have estate taxes, but the US taxes all estates with US situs assets. US stocks (for example Berkshire Hathaway) count. If your estate has or is likely to have more than $5MM in US situs assets this should be on your radar.

 

See

https://enrichedthinking.scotiawealthmanagement.com/2024/11/13/u-s-estate-tax-planning-considerations-for-canadians-owning-u-s-assets/

[73 Reds]

6 hours ago, bizaro86 said:

 

Canada doesn't have estate taxes, but the US taxes all estates with US situs assets. US stocks (for example Berkshire Hathaway) count. If your estate has or is likely to have more than $5MM in US situs assets this should be on your radar.

 

See

https://enrichedthinking.scotiawealthmanagement.com/2024/11/13/u-s-estate-tax-planning-considerations-for-canadians-owning-u-s-assets/

The US doesn't tax all estates; very few, in fact.  The estate tax exclusion is nearly $14 million/individual and double that for a married couple. Very few estates qualify and there are a myriad of ways folks with higher valued estates can escape the estate tax.  Chances are high that new tax legislation will extend the trend for higher annual estate tax exclusion.  

[Xerxes]

8 hours ago, bizaro86 said:

 

Canada doesn't have estate taxes, but the US taxes all estates with US situs assets. US stocks (for example Berkshire Hathaway) count. If your estate has or is likely to have more than $5MM in US situs assets this should be on your radar.

 

See

https://enrichedthinking.scotiawealthmanagement.com/2024/11/13/u-s-estate-tax-planning-considerations-for-canadians-owning-u-s-assets/

thank you 

 

so the trick is to keep your global assets below $5M USD, … or alternatively know where you will meet your end, just don’t go there ,,,, or know when you will meet your end and sell all U.S. assets two days before. 
 

reading the link you shared, I think the $5.4M USD is the aggregate global assets limit, that if breached triggers the second condition. 
 

The way you wrote it is as if the $5.4 is only U.S. assets limit. I don’t think that is correct. If so than why have a $60,000 USD trigger as the first condition. 

 

 

[bizaro86]

2 hours ago, 73 Reds said:

The US doesn't tax all estates; very few, in fact.  The estate tax exclusion is nearly $14 million/individual and double that for a married couple. Very few estates qualify and there are a myriad of ways folks with higher valued estates can escape the estate tax.  Chances are high that new tax legislation will extend the trend for higher annual estate tax exclusion.  

 

It's scheduled to go down to $5.6 MM as of right now, and most US estate tax planning is more complicated for Canadians because it isn't our primary tax jurisdiction.

 

You're required to file an estate tax return with over $60k in US situs assets, which really isn't much imo to trigger a significsnt reporting burden in a foreign country.

[bizaro86]

47 minutes ago, Xerxes said:

thank you 

 

so the trick is to keep your global assets below $5M USD, … or alternatively know where you will meet your end, just don’t go there ,,,, or know when you will meet your end and sell all U.S. assets two days before. 
 

reading the link you shared, I think the $5.4M USD is the aggregate global assets limit, that if breached triggers the second condition. 
 

The way you wrote it is as if the $5.4 is only U.S. assets limit. I don’t think that is correct. If so than why have a $60,000 USD trigger as the first condition. 

 

 

 

I'm not an expert on this at all, but my understanding is that once you're over $60k US situs assets you have to file. 

 

Then you pay US estate tax based on the proportion of US assets you have, to the extent your total assets are over the thresshold.

 

Eg if 10% of assets are US situs and you're over the threshhold by $1MM then you pay estate tax on $100k of assets. 

 

Anyway, it's nearly a certainty my estate will need to file, and I prefer not to pay, so I'm considering options to keep money outside of the USA. 50 bps is expensive though.

Edited April 24, 2025 by bizaro86

[73 Reds]

1 hour ago, bizaro86 said:

 

I'm not an expert on this at all, but my understanding is that once you're over $60k US situs assets you have to file. 

 

Then you pay US estate tax based on the proportion of US assets you have, to the extent your total assets are over the thresshold.

 

Eg if 10% of assets are US situs and you're over the threshhold by $1MM then you pay estate tax on $100k of assets. 

 

Anyway, it's nearly a certainty my estate will need to file, and I prefer not to pay, so I'm considering options to keep money outside of the USA. 50 bps is expensive though.

Yes, a tax return is required but IMO there is a near-0% chance that current estate tax treatment is not extended, and likely made permanent by this Congress.

[bizaro86]

4 hours ago, 73 Reds said:

Yes, a tax return is required but IMO there is a near-0% chance that current estate tax treatment is not extended, and likely made permanent by this Congress.

 

Worth noting that the exemption can't be transferred between spouses when they aren't US citizens. So while US citizens can effectively double the limit, that doesn't apply for Canadians. 

I think in general I'm interested in putting more distance between my money and the US government. I don't think wealthy foreigners are a group that will get much sympathy in Congress and I'm not interested in ever paying US taxes. 

[73 Reds]

2 minutes ago, bizaro86 said:

 

Worth noting that the exemption can't be transferred between spouses when they aren't US citizens. So while US citizens can effectively double the limit, that doesn't apply for Canadians. 

I think in general I'm interested in putting more distance between my money and the US government. I don't think wealthy foreigners are a group that will get much sympathy in Congress and I'm not interested in ever paying US taxes. 

Can't blame you for that!  But I think both you and your spouse are each entitled to your own exemption if you own assets individually.  I believe you are referring to the unlimited marital deduction which is not applicable to non-US citizens.

[MMM20]

BRK is trading around intrinsic value and 2 standard deviations above two decade average P/E and P/B. I'm increasingly wondering if BRK is the proverbial 14-year-old thoroughbred still trading like she's in her prime. I'm tempted to sell to a token position, fully aware that would've been a horrible mistake for BRK's entire history.

 

 

 

 

 

 

 

Edited April 25, 2025 by MMM20

[sleepydragon]

4 minutes ago, MMM20 said:

BRK is trading around intrinsic value and 2 standard deviations above two decade average P/E and P/B. I'm increasingly wondering if BRK is the proverbial 14-year-old thoroughbred still trading like she's in her prime. I'm tempted to sell to a token position, fully aware that would've been a horrible mistake for BRK's entire history.

 

 

 

 

 

 

 

 

Isn't if BRk grows book value or earning by 20%, we are back to median PE/PB? So that's just 2-3 years of passive growth.. On the other hand, the stdev of BRK is very low, and upside optionality is high (when's there's crisis), and that worth to pay for.

[ValueMaven]

$13B+ of just interest income w/optionality alone on the cash + equity portfolio + all of the subs ... I'm good holding 

[MMM20]

Has anyone taken a stab at quantifying the potential boost to earnings from Abel taking over and getting more hands on?

[73 Reds]

23 minutes ago, MMM20 said:

Has anyone taken a stab at quantifying the potential boost to earnings from Abel taking over and getting more hands on?

Way (WAY!) too many assumptions necessary, starting with the assumption that Abel's influence can do nothing to boost earnings now.

[jbwent63]

21 minutes ago, 73 Reds said:

Way (WAY!) too many assumptions necessary, starting with the assumption that Abel's influence can do nothing to boost earnings now.

I'd like to think as well that Abel is already influencing the subs underneath him in order to maximize cashflow (and earnings) back to Head Office. 

[Whensthepaintdry?]

I think in the Japan interview with both of them Buffett said Abel was already doing a way better job at optimizing the subsidiaries. 

[MMM20]

Right, so I'm starting from the assumption that he won't touch certain things while WEB is still around. Maybe I'm wrong about that.

[73 Reds]

50 minutes ago, MMM20 said:

Right, so I'm starting from the assumption that he won't touch certain things while WEB is still around. Maybe I'm wrong about that.

I think one issue is how much deference Abel pays to Berkshire's existing positions once Buffett is gone.  Hard to tell but "retaining the culture" does not necessarily mean holding on to marginal businesses, whether they be stocks or operating companies - particularly if the first generation is already gone IMO.  We'll also have to wait and see how much more aggressive Greg is than Buffett (if at all) in making attempts to acquire new operating companies.  Waiting by the phone works about as well as sifting through old S&P manuals looking for stocks.

[Intelligent_Investor]

The bigger question is will Greg get the call like Warren and Charlie did. Warren and Charlie could afford to sit on mountains of cash because sooner or later they'd get a call. If Greg isn't able to get the calls like Warren or Charlie he will need to figure a way to return all that capital to shareholders rather than letting it sit on Berkshire's balance sheet

[Blugolds]

11 minutes ago, Intelligent_Investor said:

The bigger question is will Greg get the call like Warren and Charlie did. Warren and Charlie could afford to sit on mountains of cash because sooner or later they'd get a call. If Greg isn't able to get the calls like Warren or Charlie he will need to figure a way to return all that capital to shareholders rather than letting it sit on Berkshire's balance sheet

 

remains to be seen, but just to play the other side of this, when was the last time they got a call, we probably dont hear about all the calls, but when was the last time they got the call and it ended up working out great for BRK? And there have been some calls that have been out of desperation because there was nobody else with enough cash and flexibility to get a deal done in a day or less. My point is, as BRK gets bigger and bigger, those little mom and pop businesses that want to sell to BRK are going to be more and more insignificant. And the big deals are going to be more out of necessity because of crisis, and BRK is one of the only players that can be trusted to make a decision and honor a commitment on that scale if need be. So I don’t know if it changes much who is at the helm, either you’re a smaller payer and want the preferential treatment of your baby to come under the BRK umbrella and be preserved, or you’re a big fish and got yourself in a pickle due to your own decisions or there is a crisis affecting the country or the world and you need access to capital quick and need it to be honest and reliable. Either way BRK probably still stands alone for those scenarios. I dont think that probably changes from Warren to Greg.

[CassiusKing1]

What was the last private investment opportunity that turned out to be a great investment for BRK?  Seems like those opportunities are very few and far between anymore.  Too much competition from PE firms and those that were on the radar have decided to keep it in family.

Some of the best investments lately have been Alleghany, Japanese Trading Houses, etc.  

 

I don't think anything will be much different with Greg.  Strategic additions and bolt-ons, and be the lender of last resort in crisis.

[ValueMaven]

https://www.forbes.com/sites/christopherhelman/2025/04/29/oxy-taps-ai-to-help-inject-old-oilfields-with-carbon-dioxide/

 

Meanwhile CEO Vicki Hollub says a Warren Buffett buyout “would be a dream come true.”