Laurion Mineral Exploration Inc V.LME

Tax Reasons

[Wmaver]

since recently there has been a discussion on tax incentives as to why LME might push for a sale this year.

Figured i would bring up a thought that i had last year as to why they might want to push to next year.

Not a tax planner so thoughts are of course welcome.

If a deal closes in Dec 2023, then taxes have to be paid in April 2024 - 4 months later.

If a deal closes in Feb 2024, then taxes need to be paid in April 2025 - 14 months later.  

Pretty sure anyone who is going to make millions dollars can do more in 14 months to grow that money, that would offset having to pay slighty more taxes sooner!

[matlas]

I played around with that Wmaver, and I am not so sure that is the case. For one thing, I think it is 10 month difference in your example,  But ignoring that, and just saying it is about a year, I think they would have to earn a farily high yield if they have a huge capital gain that would be impacted by the AMT change. If I just look at the federal tax, the rate would go from 16.5% to 20

[Wmaver]

True,  but you would have the full amount, even the 16% or 20% due in taxes for an extra 14 months (feb 2024 to feb 2025 = 12, Feb 2025 to April 2025 = 2 hence the 14) again it only has to cover the slight difference in the tax now vs possible new higher tax next year.   anyway,  Its not like i think they are going to hold out or anything to save a bit.  or rush things

[Wmaver]

Ah u get your 10.  Option a is 4 months option b is 14 months.  Diff is 10 months.

[matlas]

Right, but it still means paying 20.5% vs 16.5-that is an extra 24%. I would rather pay 16.5% in 2023 that 20.5% in 2024. I cannot earn enough on the 16.5% to cover the additional 4%. Plus, people also get the sale proceeds 2 months sooner in your example. I might add that if they announce before end of year, and does not close until 2024, people can choose on an individual basis whether they