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A number of my portfolio companies (e.g.The Buckle, Atrion) have recently declared large special dividends, the size of the payouts apparently increased this year to avoid the likely much higher taxes on dividends for 2013. But I never thought I would see this from Berkshire:

Berkshire Hathaway Declares Special Dividend (Omaha, NE 11/16/12)
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The Board of Berkshire Hathaway has announced the payout of a special one time dividend to shareholders of record on 12/1/2012. On 12/31/12 at ten minutes before midnight, an e-mail message will be sent to all shareholders of record. The e-mail will disclose a web address where shareholders can downloard a printable photo of Warren E. Buffett and Becky Quick of CNBC. Class A shareholders will be able to download a version that produces a full 10x12 printout. Class B shareholders will be allowed to download a version that produces a 3x5 printout. Any shareholder bringing the printout to the next annual shareholders' meeting will have the opportunity of having a Bershire employee stamp the printout with a copy of Warren Buffett's signature.

All shareholders are advised to consult their tax advisor with regard to possible monetary value of the special dividend and potential tax consequences.





sw
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Not completely unbelievable.

"Will any of the cash rich companies who have been sitting on the fence about issuing dividends reconsider their positions? What about a one time special cash dividend before the tax rates go up next year?"

"Think of companies like Apple (AAPL), Berkshire (BRK’a), Google (GOOG), Exxon Mobil (XOM) and Microsoft (MSFT)"

http://www.ritholtz.com/blog/2012/11/post-election-pre-2013-...

"Shareholders Gorge on Payouts as Tax Hike Nears"

http://www.businessweek.com/articles/2012-11-09/shareholders...

Tim
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There have been quite a few special dividends announced already with some very large percentages. Many have come for companies with large insider ownership.

http://seekingalpha.com/article/1008421-who-s-going-to-give-...

There is speculation that more will come (AAPL, MSFT) as you mention. I would be shocked if BRKA announces one.

sw
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There is next to a zero chance of a Berkshire special dividend prior to year end. But it is interesting to think about how large it would have to be to make a dent in the cash pile. A $10K/A dividend would not even consume half of the cash pile.

I imagine that more long term shareholders would be irritated to have their tax planning screwed up for the year with a last minute giant dividend.
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A picture ?? Come on ...... really ....
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I imagine that more long term shareholders would be irritated to have their tax planning screwed up for the year with a last minute giant dividend.

What would be the impact on taxes if shareholders were given the choice of a one time dividend or its equivalent in shares?

Bob
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I have heard that Warren is cheap...

sw
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What would be the impact on taxes if shareholders were given the choice of a one time dividend or its equivalent in shares?

Bob >>

for americans its a taxable event both ways.
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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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I never thought you had a funny side. LOL. :)
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Please Sir, if I have 1,500 "B" shares by the first of December, can I get a 10x12 printout?

I really think this would be fair. I'm sure Berkshire will do the right thing here. I promise to first in line to get the rubber-stamp autograph and then to display it above my mantel piece in perpetuity.
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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.


Well, his taxable income would go up quite a bit with that dividend, no?

And how, exactly, do we know what his taxable income is? The overwhelming majority of his income is not from Berkshire; is it declared publicly somewhere?
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