In a collar, you also own the underlying stock. You are correct about the tax treatment of sold options, my mistake.

So in these scenarios:

"420 - put is worth $70, call is worthless, you earn $70 when you sell that put." - Yes, the put is worth $70, so you have a $43 long-term gain on that put. The call expires worthless, and you have a $27 short-term gain on the sold call.

"450 - put is $40, call is zero, you earn $40 when you sell that put." - You have a $13 long-term gain on the long put, $27 short-term gain on the sold call.

"490 - put is $0, call is $0, all expire worthless, you're roughly even." - correct

"540 - put is 0, call is 0, all expire worthless, you're roughly even." - the put/call expire worthless and the gain/loss balance out, but your Berkshire stock has appreciated from 495 to 540.

"600 - put is 0, call is $60, you buy that call back at a total loss of $60." - You lose $60 on the options play, but your Berkshire stock has appreciated $105 from $495 to $600.

It's a hedging strategy for a year where Berkshire is arguably overvalued and the market is arugably more dangerous than usual. But yeah, you'd have to tell yourself you are happy with capping your upside at 9%. But you've also capped your downside at 1% in case things get and stay really nasty for awhile.

(Sorry, I am unsure how to "quote" your responses to switch it to italics)