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Stocks B / Berkshire Hathaway


Subject:  Re: Unbelievable Date:  11/17/2012  9:27 AM
Author:  rationalwalk Number:  195915 of 236240

Keep in mind that any cash dividend would result in a tax liability for the proceeds received by Warren Buffett personally. This would directly reduce the funds that will eventually be given to charity. In contrast, once the shares are fully transferred to the Gates Foundation and Buffett family charities any dividend would not be taxed at the foundation level and would be available for charity. Buffett could not simply give away a cash dividend he receives to avoid taxation since he already has more charitable deductions than he can use against his taxable income.

If any return of capital comes during Buffett's lifetime it would logically be in the form of buybacks as long as shares trade at a low valuation. I would be less surprised to see the 1.1x book value limitation relaxed or eliminated than to see a cash payout.
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