Warren Buffett On Tax Shelters

Warren Buffett On Tax Shelters

Warren Buffett on investing in tax shelters.

Warren Buffett On Tax Shelters

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Q3 hedge fund letters, conference, scoops etc


(inaudible) evaluation of the sums of investment in recent years. It appears that the use of tax sheltering operation is increasing and such you know companies like U.P.S. and others involved in it called Batho Silver showed with IRS. And as we know most of these transactions. Look if you show but yet there is a profit from the investor perspective do you think it's beneficial for investors to the company that they best involved in those shelters.

And if so do you think it'd be helpful if they're not disclosing statements meaning the notes the statement that Shirogane that 100 percent dirges to you.

I would repeat the URL digitized and shogunate. If you think that the involvement of corporations that you invest or anybody for that matter invest in tax shelter which is buy some additional debt. Tax shelters. Right. I've never used one and I'm not saying so I'm asking if you know that corporations involved in such activity that you shouldn't talk to pat them would you think that it had a fling.

Well I mean there are perfectly legal ways to shelter taxes. I mean we. We did and still do. But we were one of the earliest ones to go in for low income tax housing credits. In fact I met with. President first President Bush about about that one. And. That benefits us to a mild degree. It's not a big element. Of Berkshire. I mean it's peanuts in terms of Berkshire's overall value but it is a congressionally ordained. Tax Benefit. I wouldn't call exactly a shelter it's a tax benefit that. Congress has decided they're willing to offer. Businesses that because they think it's the best way to. To generate low income housing so we participate in something but that it's not a it's not a big factor. And what we do and. There's not there's nothing wrong with that then if you get into tax evasion I mean that's a whole different game that point will go to jail. But certain businesses some insurance companies reincorporated in Bermuda. And. You can save a lot of taxes you have to meet certain other tests which we wouldn't want to meet. But. If we were willing to meet those other tests there's nothing. Illegal or immoral about us moving to Bermuda we're not going to do it. And. What. If the restrictions weren't there I mean the tax code is the rule book. And do you follow the rule book. I think some of the things people do in terms of bending that rule book get very close. To fraud and sometimes cross the line of the fraud and when they do I think they ought to be prosecuted. But that's that's another game. And there has been more pushing on that I would say in the last five years and certainly was my experience earlier and there are more there. I think now it's diminished in the last year or two. But a couple of years ago there was a very aggressive marketing by some of the auditing firms and. Of these even with share percentage shares of the gain to be paid to the order and I think that those things got fairly dubious and pretty when they shopped for legal opinions and also that if you got caught doing these things you can say well I was relying on this legal opinion and therefore I shouldn't go to jail but just pay. Back taxes so. I. I don't know of any anything were associated with that has done that. But mean obviously if they pushed too far we don't want to be there.

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Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver

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