UK Posted January 3, 2023 Share Posted January 3, 2023 https://www.barrons.com/articles/berkshire-stock-what-to-watch-warren-buffett-51672586769 Link to comment Share on other sites More sharing options...
backtothebeach Posted January 3, 2023 Share Posted January 3, 2023 The AAPL position was 20% of Berkshire's market cap a while ago, now down to 16.6% (or 15% if you substract an estimated 10% tax on unrealized profits). Link to comment Share on other sites More sharing options...
UK Posted January 6, 2023 Share Posted January 6, 2023 Link to comment Share on other sites More sharing options...
omagh Posted January 6, 2023 Share Posted January 6, 2023 https://www.barrons.com/articles/warren-buffett-berkshire-hathaway-tax-51673028329?mod=hp_DAY_0 Berkshire Hathaway Could Face a Big Tax Hit if the Bull Market Resumes ... Ever since a 15% corporate minimum tax was included in the Inflation Reduction Act in 2022, there has been uncertainty about whether corporations would owe taxes on paper profits, or unrealized capital gains, on stocks starting this year. The treatment has long been that these paper profits created a deferred tax liability that is only paid when the stocks are sold, and the profits realized. Berkshire Hathaway (ticker: BRKb ) probably has the most at stake, and faces the biggest potential tax bill among U.S. corporations since its equity portfolio is so large—more than $300 billion. It has periodically had big unrealized gains in the portfolio, including $58.6 billion in 2021, and $26.8 billion in 2020. Recent guidance from the Internal Revenue Service, while not definitive, suggests that paper profits on stocks could be subject to a 15% tax this year, according to New York tax expert Robert Willens. The issue involves the tax treatment of applicable financial statement income (AFSI), a measure of earnings. “The IRS left open the question of whether ‘mark to market’ gains and losses should be disregarded when computing AFSI,” Willens wrote to Barron’s in an email. “As of now, they are included in AFSI. The IRS solicited the comments of investors as to whether these gains and losses should be backed out of AFSI or whether they should remain in the tax base. My guess is that they will remain in AFSI, potentially exposing Berkshire to a massive amount of book minimum tax.” ... Link to comment Share on other sites More sharing options...
Blugolds11 Posted January 7, 2023 Share Posted January 7, 2023 3 hours ago, omagh said: The IRS solicited the comments of investors as to whether these gains and losses should be backed out of AFSI or whether they should remain in the tax base. My guess is that they will remain in AFSI, potentially exposing Berkshire to a massive amount of book minimum tax.” ... This sounds like the IRS was asking for investors opinion, what investor would be a proponent for paying tax on paper gains? Link to comment Share on other sites More sharing options...
aws Posted January 7, 2023 Share Posted January 7, 2023 The treasury always asks for public comments with proposed regulations, which could from any interested parties, not just those that would be directly affected by the tax. I don't think anything has been decided about this issue yet. A filing from just last week says this is still an open issue and I'm sure their people are on it: https://www.irs.gov/pub/irs-drop/n-23-07.pdf pages 48-49 It would be quite unfortunate if Berkshire is caught up in the confluence of a minimum tax not really aimed at them (as they always pay a substantial amount of corporate tax) and an accounting rule that only recently brought mark-to-market gains into book income. Link to comment Share on other sites More sharing options...
Xerxes Posted January 7, 2023 Share Posted January 7, 2023 If “unrealized gain/loss” already flows through the income statement, wouldn’t there be already be tax consequence as net income is influenced by it ? Link to comment Share on other sites More sharing options...
John Hjorth Posted January 7, 2023 Share Posted January 7, 2023 (edited) 14 minutes ago, Xerxes said: If “unrealized gain/loss” already flows through the income statement, wouldn’t there be already be tax consequence as net income is influenced by it ? @Xerxes, Yes, but those taxes that are not paid related to a given year are recorded as deferred taxes. Please see Annual Report 2021, p. K-100, note (19), ref. the line : "Investments – unrealized appreciation" in the specification. Edited January 7, 2023 by John Hjorth Link to comment Share on other sites More sharing options...
UK Posted January 7, 2023 Share Posted January 7, 2023 It probably means their GAAP earnings and BV would remain almost the same, but tax float would be gone. But would this apply to all accumulated unrealized profits or only for profit made in the future? Link to comment Share on other sites More sharing options...
Xerxes Posted January 7, 2023 Share Posted January 7, 2023 13 hours ago, John Hjorth said: @Xerxes, Yes, but those taxes that are not paid related to a given year are recorded as deferred taxes. Please see Annual Report 2021, p. K-100, note (19), ref. the line : "Investments – unrealized appreciation" in the specification. thanks John Link to comment Share on other sites More sharing options...
fareastwarriors Posted January 9, 2023 Author Share Posted January 9, 2023 The Oracle of Omaha struck a gusher with his stakes in Japan’s major trading houses. Link to comment Share on other sites More sharing options...
gfp Posted January 9, 2023 Share Posted January 9, 2023 BHE sold another 10.76 million shares of BYD (HK:1211). https://di.hkex.com.hk/di/NSAllFormList.aspx?sa2=an&sid=2508&corpn=BYD+Co.+Ltd.++-+H+Shares&sd=09/01/2022&ed=09/01/2023&cid=2&sa1=cl&scsd=09%2f01%2f2022&sced=09%2f01%2f2023&sc=1211&src=MAIN&lang=EN&g_lang=en& Link to comment Share on other sites More sharing options...
sleepydragon Posted January 9, 2023 Share Posted January 9, 2023 3 hours ago, gfp said: BHE sold another 10.76 million shares of BYD (HK:1211). https://di.hkex.com.hk/di/NSAllFormList.aspx?sa2=an&sid=2508&corpn=BYD+Co.+Ltd.++-+H+Shares&sd=09/01/2022&ed=09/01/2023&cid=2&sa1=cl&scsd=09%2f01%2f2022&sced=09%2f01%2f2023&sc=1211&src=MAIN&lang=EN&g_lang=en& I am wondering if this means WEB is bearish on auto stocks in general, because of high capx in an inflationary environment, or is it just BYD’s valuation too high. Link to comment Share on other sites More sharing options...
gfp Posted January 9, 2023 Share Posted January 9, 2023 4 minutes ago, sleepydragon said: I am wondering if this means WEB is bearish on auto stocks in general, because of high capx in an inflationary environment, or is it just BYD’s valuation too high. I doubt the sales of BYD are connected to some high level take on the global auto industry but who knows. I would guess that the value (and valuation) of the BYD stake became too large inside of BHE and Greg was given permission to make a call on starting a liquidation (or a partial liquidation - we'll see). Warren didn't make the original call to invest in BYD - he sent Sokol to check it out and make the decision with BHE's (then MidAmerican's) capital. I wouldn't be surprised if BYD sales proceeds ultimately fund some repurchases by BHE of the Walter Scott estate shares. Either way, BHE has plenty of uses for the capital. Link to comment Share on other sites More sharing options...
John Hjorth Posted January 9, 2023 Share Posted January 9, 2023 12 minutes ago, gfp said: ... I wouldn't be surprised if BYD sales proceeds ultimately fund some repurchases by BHE of the Walter Scott estate shares. ... @gfp, Your line of thinking here makes perfect sense to me. Link to comment Share on other sites More sharing options...
Charlie Posted January 16, 2023 Share Posted January 16, 2023 (edited) I was pretty enthusiastic finding this in my holidays in Madeira. Cheers! Edited January 16, 2023 by Charlie Link to comment Share on other sites More sharing options...
crs223 Posted January 16, 2023 Share Posted January 16, 2023 My neighbor recently bought a second home in Portugal. I didn’t get the full story but she was partially motivated by taxes. Wonder if this is a trend… Link to comment Share on other sites More sharing options...
Charlie Posted January 16, 2023 Share Posted January 16, 2023 The costs of living in Madeira are about 40% cheaper than in Germany and it is a very beautiful warm island. Link to comment Share on other sites More sharing options...
backtothebeach Posted January 16, 2023 Share Posted January 16, 2023 2 hours ago, Charlie said: I was pretty enthusiastic finding this in my holidays in Madeira. Cheers! Whoaa! Love it. Link to comment Share on other sites More sharing options...
HeadOfLeverage Posted January 16, 2023 Share Posted January 16, 2023 Buddy of mine sent a similar pic from Rome :). I had no idea they have branches in Europe. Link to comment Share on other sites More sharing options...
gfp Posted January 17, 2023 Share Posted January 17, 2023 https://www.aftermarketnews.com/ap-emissions-technologies-acquired-by-berkshire-hathaways-marmon-holdings/ I'm sure this is tiny but there is some hope that the higher price of money for private equity deals opens up the bolt-on acquisition deal flow a bit for Berkshire's many subsidiaries. Meryl Witmer mentioned something similar in a recent Barrons. Link to comment Share on other sites More sharing options...
ValueMaven Posted January 17, 2023 Share Posted January 17, 2023 Thank you @gfp the idea is that Marmon, PCP, Alleghany, can do a lot of these 'bolt' on deals ... that overtime it may add up at the Berkshire level. Link to comment Share on other sites More sharing options...
Munger_Disciple Posted January 19, 2023 Share Posted January 19, 2023 (edited) Ajit Jain bought a FL condo in 2022. Interesting news (sorry if it was already posted before): https://therealdeal.com/miami/2022/04/20/berkshire-hathaway-top-brass-pays-15m-for-flipped-fisher-island-condo/ Edited January 19, 2023 by Munger_Disciple Link to comment Share on other sites More sharing options...
Spekulatius Posted January 20, 2023 Share Posted January 20, 2023 (edited) 18 hours ago, Munger_Disciple said: Ajit Jain bought a FL condo in 2022. Interesting news (sorry if it was already posted before): https://therealdeal.com/miami/2022/04/20/berkshire-hathaway-top-brass-pays-15m-for-flipped-fisher-island-condo/ This probably means that Ajit does not want to die in his office chair in Farnam Street like Warren. Also Interesting: The Fiorenzas paid about $9.9 million, or $2,080 per square foot, for the unit in August, which means they sold it for a 60 percent markup in about eight months. Edited January 20, 2023 by Spekulatius Link to comment Share on other sites More sharing options...
Munger_Disciple Posted January 20, 2023 Share Posted January 20, 2023 (edited) 35 minutes ago, Spekulatius said: This probably means that Ajit does not want to die in his office chair in Farnam Street like Warren. Also Interesting: The Fiorenzas paid about $9.9 million, or $2,080 per square foot, for the unit in August, which means they sold it for a 60 percent markup in about eight months. It could just be another New Yorker thinking of moving to Florida. I am sure Ajit can run the insurance group from Miami just as well. Ajit owns a very nice apartment in New York city as well and he lives in Rye, NY. https://www.businessinsider.com/berkshire-hathaway-ajit-jain-one-beacon-court-14-million-new-apartment-2011-2 Edited January 20, 2023 by Munger_Disciple Link to comment Share on other sites More sharing options...
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