OLarry的动态

Why we should always tender our shares in a buyback offer? Let us understand this with the example of L&T which initiated a buyback in September 2023 L&T offered to buy back shares at a price of Rs.3200 when the market price was ~Rs 2900 on the record date Suppose two investors-Investor A and Investor B both buy 1 share of L&T in 2020 for Rs.1000 Investor A tenders his share for buyback on 25 Sep 2023 and receives Rs.3200 and buys 1 share from market for Rs 2900 the very same day while Investor B ignores the buyback offer. Investor A does not have to pay any capital gains tax since gains arising on tendering back your shares to the company in case of a buyback offer is exempt in the hands of the investor. Now let's say in March 2024, both Investor A and B sell their 1 L&T share for Rs.3600. Investor A would have total net capital gain of Rs.2830 Gain on buyback--Rs.2200(Rs.3200-Rs.1000) Gain on sale of share--Rs.700(Rs.3600-Rs.2900) Tax on capital gain @10%-- 10% of (3600-2900)-- Rs.70 Therefore, net gain--Rs.2830 Investor B would have net capital gain of Rs.2340 Gain on sale of share--Rs.2600(3600-1000) Tax on capital gain @10%--10% of (3600-1000)--Rs.260 Therefore, net gain--Rs.2340 This makes it evident how Investor A's one small decision of tendering his share in buyback provided him with additional 21% gain compared to Investor B. Overall, participating in buyback offers is a prudent strategy for investors to unlock value in their investments, capitalise on favorable pricing opportunities and derive tax benefits.

Are you thinking of selling your company stocks to diversify your portfolio (or for other reasons)? There are a few key considerations before you do so, including: ?? What happens to your equity when/if you leave your company ?? How you'll be affected by capital gains and losses, come tax time ?? Your company's ESPP contribution rules For other factors, we encourage checking out our latest post on the blog: https://lnkd.in/g4kAmvzi

Selling company stocks can be a strategic move — so long as you can avoid the pitfalls. Our recent blog explores some top considerations. As always, please reach out with questions about how you can use your shares to align with your long-term financial goals.

Should We Buy Shares Before or After a Bonus Issue? When a company announces bonus shares, many investors wonder: "Should I buy shares before or after the bonus?" Here’s a breakdown to help you decide! What Happens During a Bonus Issue? A bonus issue is when a company gives extra shares to existing shareholders for free, based on how many shares they already hold. After the bonus, the share price adjusts downward to reflect the increased number of shares, but the overall value of the investment remains the same. Example: Share price before bonus: ?3,000 You buy 10 shares for ?30,000. After a 1:1 bonus, you have 20 shares, and the price adjusts to ?1,500. Total value = ?30,000 (20 shares × ?1,500). If you buy after the bonus, the share price is already adjusted to ?1,500, so you can buy 20 shares for ?30,000. The value of your investment is still ?30,000. Key Considerations: No Difference in Value: Whether you invest before or after the bonus, the total value of your investment remains the same. Tax Implications: Bonus shares may be subject to capital gains tax when you sell, as your cost per share changes. If you buy after the bonus, you only deal with the lower purchase price. Liquidity and Price Adjustments: Bonus shares increase liquidity in the market, which could affect price movement. Some investors prefer to buy before the bonus for the psychological benefit of receiving extra shares. So, When Should You Buy? Before the Bonus: If you want to receive the bonus shares and increase the number of shares you hold without spending more. After the Bonus: If you prefer to buy at the adjusted lower price and avoid any confusion about adjusted costs or potential tax implications. Both options are good, but your decision should depend on your investment strategy and goals. #BonusShares #StockMarket #Investing #PersonalFinance #investing #reliance

From 01 Oct 2024, Consideration received from Buyback of shares will be treated as divided income in the hands of shareholders and tax will be charged at the applicable slab rate of the assessee (as it will be a Income from other sources) Your Cost of acquisition of Buyback shares will be Capital loss This will lead to I) Tax now being charged on receipt leading to higher payout of tax II) This will be discouraging buybacks as the mode of capital return Companies and investors now need to reevaluate their strategies Your views on this ? #tax #market #buybackofshares #taxplanning

***Read the first one and make sure that you understand that LLC's taxed as S or C corps are not corporations, only a C-Corp is a corporation.*** The general requirements for qualifying for the 0 percent federal tax rate on gains from the sale of QSBS include the following: The investor must not be a corporation. The investor must have acquired the stock at its original issue and not on the secondary market. The investor must have purchased the stock with cash or property or accepted it as payment for a service. The investor must have held the stock for at least five years. At least 80% of the issuing corporation’s assets must be used in the operations of one or more of its qualified trades or businesses. The aggregate gross assets of the corporation that issued the stock cannot have exceeded $50 million at any time before (and including the time immediately after) the issuance of the stock to the taxpayer. During substantially all of the taxpayer’s holding period of the stock, at least 80 percent of the issuing corporation’s assets must be used by the corporation in the active conduct of one or more qualified trades or businesses.

We have successfully revalued UDMPAY and increased the company's book value, the update is already reflected in the tax office! This means that from June 1, 2024, we are raising the cost of a share in the company for investors by 20%. By the end of May we are signing agreements with several large investors and I have the opportunity to offer you a share in the company at the same price as part of this deal. The conditions are as follows: The current value of a 1% share of the company is 7,395,000 rubles. From June 1, 2024, the cost of 1% will be 8,874,000 rubles. The minimum investment amount is 100,000 rubles. When signing a contract before May 30 inclusive for an amount of 5 million rubles, I can offer you the cost of 1% at a price of 4,280,000 rubles, since we are now introducing several investors for 5 million rubles at this price and I can include you in this deal. Payment may be made later, it is important to sign the contract before this date. The forecast cost of a 1% share in 2025 is 11,215,000 rubles, in 2026 17,120,000 - 42,800,000 rubles, since it is planned to sell shares to a large bank and the cost will depend on the assessment of the transaction. The company does not pay dividends. The investor makes money on the difference in the cost of buying and selling a share. Request detailed information in private messages.

Buyback Tax treatment has been changed. Buyback amount taxed as dividend in the hands of shareholders at the marginal rate. Amount bought back treated as Capital loss goes to offset the Capital Gains made by the assessee... As a strategy in the year of any buyback offer, make sure to book commensurate capital gains to offset the bought back amounts. https://lnkd.in/d5xtXFmA

You have a $10M offer on the table. But it will cost you $3.71M in tax. Secure your bag and get the whole $10M ?? Here's the deal: You are about to sell your company for $10M. It's a corporation that's eligible for QSBS treatment. This means the first $10M of capital gain is tax-free! The catch? You have to hold the stock for 5 years, and you've only owned the company for 4. The buyer is motivated and won't wait another year. What do you do? You could hope for another buyer. Maybe you'll get more money? Not a bad option, but doing a section 1045 rollover might make more sense! Section 1045 allows you to roll over your QSBS stock into other QSBS and defer the capital gain! If you've held the first QSBS stock for at least 6 months, doing a rollover can help you meet the 5-year holding period. This means you can avoid the capital gains tax entirely if you roll it over and meet the holding period. The risk? You've got to find another company that qualifies. And since qualifying companies usually aren't publicly traded, you might not get liquidity for a while. To mitigate this risk you could choose to roll over just a part of your proceeds. And, of course, I have other ideas on how to defer the gain further or reduce your tax. But you're going to have to stay tuned! (??) Questions? I'll answer in the comments! #money #taxes #finance #strategy #motivation

Read here to find out about capital gains and dividend income: