Sounds like double ungood day for Linode

Posted Aug 7, 2025 22:36 UTC (Thu) by bartoc (guest, #124262)
In reply to: Sounds like double ungood day for Linode by mote
Parent article: LWN is back

I'm not sure how it works in the EU, but in the USA these sorts of leases are really, really common for all types of real estate.

I think it's because C-corporation taxation is quite punishing compared to other ownership structures, particularly for capital gains realization.

Sounds like double ungood day for Linode

Posted Aug 11, 2025 10:02 UTC (Mon) by farnz (subscriber, #17727) [Link] (1 responses)

I've noted a common pattern across the world (including the EU) where a publicly traded holding company owns two sub-companies: one owns capital assets like land and buildings, which it leases to the other sub-company that operates them.

The purpose is not taxation-related in the cases I've seen; rather, it's that the sub-companies have separately audited accounts, and thus you can be confident (as an investor in the holding company) that you're not seeing results "goosed" by accounting tricks to move losses between capital and operational sides. Instead, you've got an audited set of accounts for the capital side, and a separate set for the operational side, which ensures that you cannot be tricked by accounting games.

Corporate separation

Posted Aug 11, 2025 14:03 UTC (Mon) by corbet (editor, #1) [Link]

That separation also insulates one company from a failure of the other; if the company using the building goes bankrupt, the building itself is unaffected (beyond needing to find a new tenant).