No. of Recommendations: 0
Over 40+ years Berkshire owners have become far wealthier thanks to Buffett's policy of retaining $1 dollars and investing on our behalf rather than distributing that cash-- and subjecting us to mandatory 30% or so state plus federal annual tax bills. Deferring that bill and investing a 30% higher balance on our behalf is a large source of our present wealth.
Question about capital gains - My understanding is that, in the USA, companies pay regular corporate tax rates on capital gains. That would mean that, after deductions, companies pay 21% federal tax on realized capital gains, plus whatever state corporate tax rates are in effect. For a company headquartered in Nebraska, that would be another 5.84% on income over $100,000/year. Since losses can be brought forward (I think it is 5 years), previous losses (for instance, on the airlines investments or Occidental in 2020) can perhaps be used to reduce the taxable income on the big Apple gains this year (and the smaller Bank of America gains).
Is that correct? (Perplexity.AI thinks it is.)
DTB
