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Penn West Petroleum Ltd. Message Board

  • cowley_ed cowley_ed Apr 17, 2013 5:06 AM Flag

    IRA Bonus

    "For Penn West shares held within a qualified retirement plan such as an IRA or other U.S. tax-exempt account, no amount should be reported as taxable income and Canadian withholding tax (as described below) should no longer apply to dividend payments in respect of these shares." [from PWE website] I was expecting Canadian with holding of 15-25%. Nice surprise! Ed

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    • What the Canadian taxman giveth, the American taxman taketh away. When you eventually make a withdrawal from your IRA, everything, including dividends, will be taxed as regular income. So you might be paying a 30% tax on dividends from an IRA instead of 15% from an individual account. But that's not all. Your IRA withdrawals will bump up your total income so you will be paying at a higher tax rate as well as having to pay taxes on 85% of your social security (which you already paid taxes on when you were working) Now with Obamacare, your Medicare dues which are deducted from your social security check will also go up at certain income levels if your IRA withdrawals bump up your income to certain levels. Your state income tax may also go up if your state taxes IRA withdrawals.

      • 1 Reply to garryj_bh
      • With respect to my IRA, I'm 68 and have been taking IRA distributions for a long time. My interest and dividend income exceeds my withdrawals. As for paying taxes, if I'm making income, I don't mind paying taxes and more importantly, I've been able to enjoy the retirement income without having to withdraw the principal. Have never understood those who make a good income cry about taxes....I'm grateful and count my blessings.l

    • Yep, great investment. Gosh, a tax free 10% dividend! YAY! All you have to do is give up 30% of the cost basis. What a deal. So let's see...if you were shrewd enough to buy this gem in October at $13, you have received not ONE, but TWO massive dividends equaling a big 54 cents. And all you had to give up for it was $4. So, it appears I have been wrong for quite some time now. I was saying that you only had to give them 4 and they would give you one dividend back. Nope. Now you only have to give them EIGHT dividends and they'll give you one back. This one just gets better and better.

      Attention, all savvy investors: I will make a better deal for you. Instead of giving up $4 to get 54 cents in this crazy market, why don't you give ME the $4 and I will give you $2 back! A much much better return on your money!

      Sentiment: Strong Sell

    • This is to confirm Cowley_ed is correct. I have PWE in a traditional IRA and in a nonIRA. There no Canadian taxes withheld in the IRA, 15% in the nonIRA. A 10% dividend in this low interest rate environment and 5 million acres of oil/gas land makes sense to me. Whats more, PWE has an already strong balance sheet and will be selling noncore properties to reduce debt further.

      • 1 Reply to infinitidrivr
      • My IRA withdrawls are carefully calibrated not to exceed an amount that would cause my SSI to be taxed AND not to exceed income beyond my standard deduction and exemptions so I pay no Federal tax. In the mean time I reinvest the divvys [like buying another 750 PWE] and let them compond tax free until I eventually and cafrefully withdraw them. Ed

 
PWE
0.91-0.0400(-4.21%)May 5 4:02 PMEDT