Brookfield Office Properties Inc BRPYF

Tax Changes and Dividends and BPO.PR.E

[SONOFFERGUS]

Pierre may have hit on this before, but I note with interest that changes to alternative minimum tax are effective this year.

AMT minimum moves way, way up from $40k to $173k.  This creates more room to earn dividends without paying tax -- from $55k to &72k.

IMHO, this change will be broadly positive for BPO and other high-yielding stocks over time.  It will of course take a bit for the change to be absorbed by investors, but I think this an issue that benefits a lot more retail investors than are harmed by the cap gains rate change. 

On BPO, the Es are stupid cheap versus every other series.  Are shorts going series by series or does someone at TD need to get out of the Es EOD tomorrow because of tax change?  Hmmm. 

Anyone who is looking to buy should be all over the $12.70 ask.  Crazy cheap.  Compare terms to As.  No contest, but 40 cents cheaper.

I am setting up for a huge move up Monday when tax-selling is done, FWIW.

[SONOFFERGUS]

I am interested to see if any "real" buyers come in to clean out the 19,200 offer on the Es. I would do more but am way too long already lol.

[pierrelebel]

I am glad someone is thinking about taxes. It is a bit of an obsession of mine, back to the days when I actually worked for the tax department in the 60's. "Taxes" is a subject ignored or dismissed by so many posters or readers. Too often some folks think of taxes as they affect their own situation, not the market in general. For example, a Canadian investor with a portfolio of

[SONOFFERGUS]

Hi Pierre. I like your play on the Ts -- the high current dividend lowers duration (if we can use that term for prefs) and payback period in a very pleasing way. However, the Ts (and the As, with reset on the horizon) are benefiting from the luck of timing.  Their terms are significantly worse than those of the Es, and it is rational to expect that the luck will even out over time. T $14

[Carena]

Good morning Sonoffergus, I can't disagree with anything you said.  In regards to the E's, I am loaded up on them and you may have convinced me to put a bit more capital into them.  Lol. Post June 25 should be interesting for sure.....I think the TSX is now down 5 weeks in a row. Carena

[pierrelebel]

Good afternoon SONOFFERGUS. Sorry for late reply, this was a family weekend. The older one gets, the more one appreciates those visits with the family. "Anyway, we'll see Monday am!" As it turns out, there was little to see this morning. At 11:30am, I counted a total about 2,000 shares traded on two BPO issues and no trade on the rest. The few trades at higher prices late in the

[wynner]

The W,X,Y have a higher yield . Naughty.

[SONOFFERGUS]

Indeed they do wynner.  I was comparing the fixed resets -- floating and fixed rate instruments are not directly comparable ofc. It will be interesting to see how the floaters perform when more cuts come through.  Floaters from the better credits got absolutely smoked when the 25bp cut hit.  This makes no sense of course  -- they should be priced off of the extant policy rate

[wynner]

 I hear you. Watching for uptrend and volume. My X and W ticked up a bit today. I don't own the Y right now. Also have a watchlist with BN.PF.K which popped today. It is a floater that pays a nice monthly dividend. The Traps got a bid too TRP.PR. I am more in the 4 cuts by next year . But really nobody knows. That would mean the X,W,Y will have yield of about 12.25% IF the share price is

[SONOFFERGUS]

Good afternoon Pierre. I am less of a trader than a noticer of price anomalies.  I have done pretty well moving in and out of positions when prices have moved materially away from my models, but BPO is a core holding for me. I note that the Ts -- which I use as the benchmark series since they reset most recently -- have a current yield of 11.71% on $14.50.  A switch I would find