Provided by:  Jennifer Kirschenbaum, Esq.

October 18, 2018

 

Thank you to Bryan Koshers, CPA for sending over!  I've gotten several inquiries on how MLMIC Payouts will be treated tax-wise (outside my purview).  For our readers, always make sure you are utilizing the services of a competent Healthcare accountant!!!  #AllabouttheTeam... 


 

Hi Jenn-

As you know, Berkshire Hathaway has starting sending out their much anticipated “MLMIC payouts”.   In 2017, MLMIC / Berkshire Hathaway decided to convert from a mutual insurance company to a stock insurance company, this process is known as demutualization.  The result of this demutualization is, in essence, a sale of your ownership in the insurance company for the payment amount received.  This payment would be treated for tax purposes as a long term capital gain without a tax basis and thus the entire payment amount would be subject to tax.

I hope this helps you and those in the dark.  That said, there are some planning opportunities here and your client’s should discuss this transaction with their healthcare CPA for further advice.

Bryan Koshers, CPA
Koshers & Company, LLC
1094 Merrick Avenue
Merrick, NY 11566
(516) 481-1515 voice
(516) 481-1784 fax
Bryan@KoshersCo.com
KoshersCo.com

Pursuant to IRS Circular 230: If any tax advice is contained in this communication or attachments, it is not intended or written to be used, and cannot be used, for the purpose of avoiding tax or related penalties under federal, state , or local law.


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