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Verizon Vodafone Buyout Dependent on Tax Avoidance
Could Face $38 Billion Tax Bill On Deal
by Karl Bode 06:25PM Monday Apr 29 2013 Tipped by FFH5 See Profile
Verizon has been leaking oodles of details to the press lately about their very clear desire to buy Vodafone's 45% ownership stake in Verizon Wireless. First came leaks that AT&T and Verizon might buy all of Vodafone together, then came other leaks stating Verizon wanted to pay around $100 billion for the stake, while Vodafone wants more like $130 billion. Now those same chatty sources state the obvious: that the success of the deal will be determined by how easily both companies can avoid an estimated $38 billion capital gains tax bill. Given Verizon's skill at avoiding paying taxes in the States and skill at not only avoiding taxes but getting refunds after mega deals, this doesn't seem like much of a hurdle for them.

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tmc8080

join:2004-04-24
Brooklyn, NY
Reviews:
·Optimum Online
·ooma
·Verizon FiOS

income vs capital investment

the assets grew in value, no denying that.. and for that the taxes will be charged on BOTH the sale & the acquisition. think about what happens when you sell a property.. the buyer pays a mortgage tax and the seller pays land transfer taxes and in some cases capital gains/estate taxes as well.

however, Verizon could throw out a bargaining chip.. 1 gigabit internet (for $70 or less)-- iron clad to the fios footprint with no loopholes.
TBBroadband

join:2012-10-26
Fremont, OH

Re: income vs capital investment

give up on FiOS changing anytime soon, let alone it expanding. They're going to milk their copper as much as they can and the areas they won't be upgraded; will most likely be spun off to someone else or to their own company. VZ will focus on their FTTH network, VZ Business (formally MCI WorldCom/UUNet) and their Cellco Partnership brand- aka VZW.

tshirt
Premium
join:2004-07-11
Snohomish, WA
kudos:5
Reviews:
·Comcast
said by tmc8080:

however, Verizon could throw out a bargaining chip.. 1 gigabit internet (for $70 or less)-- iron clad to the fios footprint with no loopholes.

Which does exactly what for the majority of the population?

since this is about a nationwide WIRELESS company, something in the LTE range would be more likely. But how about they pay the tax and benefit EVERYONE not just Verizon stockholder and customers.
tmc8080

join:2004-04-24
Brooklyn, NY
Reviews:
·Optimum Online
·ooma
·Verizon FiOS

Re: income vs capital investment

said by tshirt:

said by tmc8080:

however, Verizon could throw out a bargaining chip.. 1 gigabit internet (for $70 or less)-- iron clad to the fios footprint with no loopholes.

Which does exactly what for the majority of the population?

since this is about a nationwide WIRELESS company, something in the LTE range would be more likely. But how about they pay the tax and benefit EVERYONE not just Verizon stockholder and customers.

wow, are you naïve to think that when taxes are paid to the federal & state government that it benefits EVERYONE. tell it to hundreds of thousands of Sandy victims who are getting 40% or less on their NFIP claims and shoddy rapid repairs which in some cases are DANGEROUS & life threatening.

at least with cheap ultra fast as you can get it broadband, that's something everyone here cares about..

tshirt
Premium
join:2004-07-11
Snohomish, WA
kudos:5
Reviews:
·Comcast

Re: income vs capital investment

It would be that much less we had to borrow to attempt to fix that or to pay for other programs.

I'm not sure what or why people are have problems with the disaster relief, but it still wouldn't justify crediting taxes so that YOU get FIOS.
certainly any benefit for THE entire US forgiving federal taxes should benefit all taxpayers equally.
If Verizon also wants to extend fios on their own dime (well your's, actually ) they can do so at anytime.

OSUGoose

join:2007-12-27
Columbus, OH
Hey that's what happens when you have cousin Vinnie's "associates" do the work.
Skippy25

join:2000-09-13
Hazelwood, MO
Why is the government paying for any of it anyway?

Insurance should be and if not insurance the individuals.

tshirt
Premium
join:2004-07-11
Snohomish, WA
kudos:5
Reviews:
·Comcast

Re: income vs capital investment

He was referring to the national flood insurance program, the only place to buy FLOOD insurance.
NFIP was never intend to provide 100% coverage but should provide around 80%.
the problems being different methods of calculating the damage and the value The two most common reimbursement methods for flood claims are : Replacement Cost Value (RCV) and Actual Cash Value (ACV). The RCV is the cost to replace damaged property. It is reimbursable to owners of single-family, primary residences insured to within 80% of the buildings replacement cost.

congress has finally changed the rules somewhat and premiums will no longer be flat rate and they are going to be a little more aggressive about buy outs (you get slightly more money if you agree to move rather than rebuild in flood prone areas.)
Due to rising sea levels more property in ever more expensive areas are at risk so hopefully it will continue to evolve in to a more cost/value type program.
Skippy25

join:2000-09-13
Hazelwood, MO

Re: income vs capital investment

I just get flood insurance through my State Farm agent, are you referring to something else people buy or is that the same thing and I just "think" I am getting it through my agent?

tshirt
Premium
join:2004-07-11
Snohomish, WA
kudos:5
Reviews:
·Comcast

Re: income vs capital investment

the same thing you get it through an agent but it is a federally subsidized program, without the subsidy few could afford it . if the people in the areas sandy hit allow their homes to be grossly undervalued (or their county which is supposed to fairly access the fair value for tax and insurance values) it might explain the OP's claim that people where only receiving 40% of their damages.

It was put in place because insurance companies refused to provide universal coverage on their own, EVERYONE pays the same rate no matter what company actually writes the policy.
dra6o0n

join:2011-08-15
Mississauga, ON
Reviews:
·ITalkBB
Funny thing, tax evasion started because people didn't want their growth or progression to be put on hold, or slowed to a crawl.

A corporation wants to 'be that large company that makes millions every month'... Not by 'barely past breaking even for a few years'.

intok

join:2012-03-15

Re: income vs capital investment

No, tax evasion started and continues as a way for greedy executives to skim as much off the top from their companies income as the possibly can without ever having to do any actual work.

It's called vulture capitalism, the only reason they can get away with it is because they've stolen so much they can pay off the authorities to look the other way.
old_wiz_60

join:2005-06-03
Bedford, MA

They will get a break..

all they need to do is pay some money to the right people in Washington and their tax problems will go away. Bribery works wonders in Washington.
openbox9
Premium
join:2004-01-26
Germany
kudos:2

Re: They will get a break..

That usually doesn't work for the taxman. Someone is going to pay somewhere/somehow.

IowaCowboy
Iowa native
Premium
join:2010-10-16
Springfield, MA
kudos:1
Reviews:
·Verizon Broadban..
·Comcast

Buy out AT&T and CenturyLink

If they were to buy out AT&T and CenturyLink, then there would be another Ma Bell style monopoly on landline telephone and they would double the number of cellular subscribers making it the world's largest cell operator.

The seven RBOCs that were created after the bell breakup are now down to three (AT&T, Verizon, and CenturyLink).
openbox9
Premium
join:2004-01-26
Germany
kudos:2

Re: Buy out AT&T and CenturyLink

That's never happen. One, the focus isn't on wireline service, for now. And two, the regulators would never allow the two largest wireless carriers in the US to merge. Having said that, I do believe that if/when we want to get serious about a nationwide upgrade of our telecommunications infrastructure, it's only going to happen if you put Ma Bell back together again and throw guaranteed profits back into the mix for the regulated monopoly.
tanzam75

join:2012-07-19
said by IowaCowboy:

The seven RBOCs that were created after the bell breakup are now down to three (AT&T, Verizon, and CenturyLink).

And CenturyLink was an independent -- it was not a member of the Bell System. They did buy Qwest. But then, Verizon also bought GTE, which used to be the largest independent.

(Ironically, the ex-GTE territories were essentially the ones that Verizon later sold to Fairpoint et al. After all, there was a reason that these territories were not part of the Bell System in the first place -- they weren't profitable enough to bother with. Eventually, Baby Verizon discovered that Ma Bell knew what she was doing all along.)

ILpt4U
Premium
join:2006-11-12
Lisle, IL
kudos:10
Reviews:
·AT&T U-Verse
said by IowaCowboy:

If they were to buy out AT&T and CenturyLink, then there would be another Ma Bell style monopoly on landline telephone and they would double the number of cellular subscribers making it the world's largest cell operator.

The seven RBOCs that were created after the bell breakup are now down to three (AT&T, Verizon, and CenturyLink).

Throw in Alcatel-Lucent on your list to Ma all back together again - as Alcatel-Lucent is the present owner of (what is left of) the old Western Electric & Bell Labs

OSUGoose

join:2007-12-27
Columbus, OH

1 recommendation

Re: Buy out AT&T and CenturyLink

I'm actually for this, look at all the progress Ma Bell did. Let them get back together with regulation that has teeth and none of that old "you must buy our phone" BS. That's the only way were ever going to solve the needed telecom facilities update

mikedz4

join:2003-04-14
Weirton, WV

Re: Buy out AT&T and CenturyLink

what would happen to places like west Virginia?
tmc8080

join:2004-04-24
Brooklyn, NY
Reviews:
·Optimum Online
·ooma
·Verizon FiOS

utility = regulation = taxes

whether you like it or not, the big telecoms are still treated like utility companies, while the cable companies are treated like entertainment companies. that was the bargain they paid for the breakup of Ma Bell. when these companies have a monopoly or duopoly they have certain public interests which must be maintained... as of the last couple of decades they have not been doing a good job of that so to ask for a break on taxes whether it be for wireless or wire line side of the business is like asking a cat if they would like a mouse for dinner with an unlimited supply of catnip chauffeured in a limousine to boot.

»news.limobroker.co.uk/one-year-o ··· e-57170/

amarryat
Verizon FiOS

join:2005-05-02
Marshfield, MA

Government getting in the way

Why not take the ambiguity out of the process for everyone and have uncle sam send a tax bill directly to everyone involved - the shareholders and the customers of Verizon, rather than sending it to Verizon. What's the difference?