USA TODAY International Edition
Buffett: Berkshire tax break up to $ 9B
Tells shareholders about Trump plan’s expected impact
Berkshire Hathaway could get a $ 9 billion- plus tax break just on its stock holdings in other companies if President Trump’s proposed corporate tax cut becomes law, CEO Warren Buffett told shareholders Saturday.
Speaking at the company’s annual meeting, a weekendlong celebration known as the Woodstock of Capitalism, Buffett said a 10% cut in the corporate rate would reduce the tax owed on more than $ 90 billion in unrealized gains in holdings of companies like American Express, Coca- Cola and Apple.
The conglomerate is also considering timing sales of stock to take advantage of expected changes in tax law, Buffett said.
The idea is to lock in losses this year, while tax rates on realized gains are higher, because the ability to write off losses could let the government take as much as 35% of the hit, he said. At the same time, any moves to cash in positions that have risen in value might be deferred until next year, hoping that taxes on the sale would be lower.
“It would be a slight preference, but it may be a factor in accelerating losses and ( delaying) any gains,” Buffett said.
The discussion on taxes came early in Berkshire’s meeting, where Buffett and Berkshire vice chairman Charlie Munger make themselves available for hours of questions from analysts and shareholders.
Other shareholders prodded them on Berkshire holdings, including Apple, IBM, Wells Fargo and whether the company would sell its position in CocaCola, worth $ 16.6 billion as of Dec. 31 according to Berkshire filings, over claims that the softdrink maker contributes to water shortages in the developing world.
Buffett criticized Wells Fargo, Berkshire’s largest outside stock holding, for failing to act quickly when it learned employees were setting up fake accounts to meet sales goals: “At some point if there is a major problem, the CEO will get wind of it, and at that moment ... the CEO has to act.”