No. I’m referring to the $13bn out of the $44bn purchase price that Twitter paid itself. As Twitter is now deep in debt, it won’t be making a profit any time soon, so there will be no tax paid on that $13bn purchase.
The $44bn purchase is broken down more or less as:
- $26bn by Musk ($20bn of which was from Tesla shares),
- $5bn from other investors, including that Saudi prince,
- $13bn in a loan that Twitter took out to buy itself on behalf of its new owners.
The process is known as a leveraged buyout, and it’s what’s killed many staple businesses that were otherwise perfectly viable, eg Toys R Us.
flipht@kbin.social 1 year ago
Overpaying and then destroying the value means that eventually, he will be able to claim losses on his taxes. This will allow him to reduce his tax liability for his profitable businesses.
GigglyBobble@kbin.social 1 year ago
Sure but it doesn't make sense to destroy more capital than you're liable in taxes.