Tax Inversions and Your Investment Club

Laurie Frederiksen on

The hot topic for investors these days is tax inversions. These happen when a company reorganizes from being based in the US to being based in another country in an effort to avoid US taxes.

There are several companies that are popular in the bivio investment club community with tax inversions underway. For example, Burger King (BKW) is acquiring Canadian company Tim Hortons (THI), Abbvie (ABBV) is acquiring UK company Shire (SHPG) and the Medtronic (MDT) is acquiring Irish company Covidien (COV).

These reorganizations may help the companies avoid some taxes, but they create tax issues for your investment clubs. As is discussed in this Forbes article this morning, shareholders of the companies which are leaving the US will have to recognize capital gains when the conversions become effective.

Whopper Reason Shareholders Should Hate Inversions? (Hint, It's Not About Patriotism)

It's something you might want to take into account when you are making your investment decisions.

Laurie Frederiksen
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