Is there anyway to determine prior to the sell date what will be the adjusted income. I don't want it to be at "zero". I guess I could do an approximation to get me in the ball park, but that doesn't seem practical.
Last year, I sold off KMP, (rebought at a later date) and after 4 years of distributions, my cost basis was zero, didn't add up but that's what the K1 showed.
It is not necessarily true that there will be a “step up” in basis.
If the units are held in an irrevocable trust (in contrast to a revocable trust), it is more likely that the basis will NOT be stepped up. (Some exceptions may be possible.)
If the units are held in an IRA, there will NOT be a step-up in basis for the inherited IRA.
The MLP will report the accumulated basis adjustments to you in an attachment to the K-1 in the year you sell. It will also tell you how much ordinary income was generated by the sale.
• If a unitholder dies and the units pass to his heirs, the basis is reset to the fair market value of the units on the date of death, and the prior distributions are not taxed.
How does one keep track of the "adjusted cost basis"?
Since the above changes every year. I don't think its simply tracking the distributions minus the original purchase price. I found the below info and I'm trying to apply that to my situation.
"Your share of partnership income reported on the K-1 each year adjusts the basis upward; and your share of deductions reported on the K-1 each year adjusts the basis downward.
Once you reach zero, the portion of the distribution that was return of capital now becomes taxable—all your investment capital has been returned. Taxation of this portion of the distribution will occur at the capital gains rate."
Yes. If you follow the various MLP boards on Yahoo and Investor Village, you will know that there is a serious lack of communication between the brokers and the MLPs which means that investors often have to deal with the K-1 support people when they get their incorrect K-1s. Sometimes it's as simple as when you tell your broker to see a specific lot of units, but the MLP always does first-in, first-out until you tell them differently. More importantly, someone posted about KMP recently that he moved his father's account between 2 brokers a few years back, and the new broker picked up the current value of KMP as his cost. Maybe a tax planning opportunity there?
Anyway, yes. There is no guarantee that the MLP will know that the move in KMP units between you and the person you gift the units to was anything other than a sale. (Bad grammar, but it's early.) The K-1 for both the donor and the donee would be wrong in that case. I suspect that's a common occurrence.
Some irony here in that waccamabill's Plantation mentality finds him complaining about profits he made from the Plantation pipeline. Moreover, he looks for sympathy for making gobs of $ and having to pay taxes.
Maybe he should, get a better accountant, get a better investment, get a better outlook, get a better life.
JMHO - Richard Kinder
In your last paragraph, the first sentence makes sense, but I am not sure about the second sentence. Why would KMP report anything differently from what you stated in the first sentence? Are you suggesting that KMP might take the reduction in units in the first account (due to transfer to a different account) as a sale having occurred in the first account, i.e., instead of a transfer?
I see a correlation with oil declining......oil will go lower....around 85......we shall see
Don't understand what those who think they can vote down the merger are thinking
Just look into all the SEC filings, when KMI speaks of shareholder or unitholder vote. KMI holds 100% or very close to 100% of the actual voting rights. EPB is different but KMI owns close to 50% of EPB anyway so that vote is a slam dunk.
Well KMI did not merge with KMP like EPD did. KMP merged with KMI, the opposite of what EPD did. So Rich Kinder did what he said and considered other options. But it makes no difference what is stated on this message board. Lawyers always file lawsuits on every large merger suing everyone possible. In the end KMI will acquire KMP, KMR, EPB and the lawyers will spend years suing. The lawyers will settle for anything that gives them money while settling the actual unitholders losses for pennies on the dollar. IMHO KMP shareholders get 10 cents per Unit(share) in 2017.
"...Q: Would KMI ever merge with KMP the way Enterprise Products merged with its GP?
As was mentioned in our analyst day materials, KMP would consider other options if we get to a point where we
cannot deliver attractive returns to LP investors. However, we do not believe we are at that point. We would
point out that KMP has a highly attractive total return prospect, with a current yield of nearly 7% and a target
distribution growth rate of 5% for the next three years supported by organic expansion capex projects of nearly
$14 billion that we expect to place in service over the next 5 years.
Your absolutely correct. Got the wrong stock. It's kmp that now has closed down 9 of the last 10 days. This getting old is tough and not for sissies.
More incorrect information from the KMP village idiot. The thread is about gifting to someone in a lower tax bracket. The gift has to be transferred into the new account BEFORE the sale of KMP (BEFORE the merger is completed), otherwise there is no transfer of KMP units and there will be no transfer of the tax burden that arises from the sale. The merger is expected to be completed in Q4 2014, so she needs to decide soon.
Mr. Sjohns, the only presentation I can find for 2/23/2014 is the Response to the Barron's article. Can't find what you keep referring to. But what difference would it have made? If they had told you in February would you be a happy camper? If you are half as wealthy and brilliant as you claim ,you would have readied a solution instead of spending time on the #$%$-n-moan routine . Sincerely Mr.Phil2u