Jump to content

Put Option - tax implications?

Recommended Posts

Let's not forget about the tax implications here too.  From "The Snowball" someone was quoted as saying that not only does WB know the tax laws inside out but he can play them like a fiddle!  When the puts are marked-to-market annually, the difference is a loss on the income statement.  A current expense for which we paid negative cash (received a premium).  This protects income generated from other sources from paying tax.  I think this put option is a real work of art.  In one fell swoop it highlights the voting vs weighing aspects of Mr Market (recent negative commentary linking it to a reduced stock price), the greed vs fear aspects regarding purchase motivations (someone bought it!) and a nod to the sometimes odd benefits of accounting rules and the tax man who "requires" Berkshire to shelter income from taxes by marking-to-market.  A University course could be taught on this one transaction.  I almost want to applaud!!

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • Create New...