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Linn Energy, LLC (LINE) Message Board

  • rlp2451 rlp2451 May 16, 2011 4:01 PM Flag

    I Hope They DO Pass MLP Tax Legislation

    It wouldn't be the end of the world; it would likely be phased in like the Canadian roylaty trusts (and people still own them and they pay out generous dividends - look at Baytex and Enerplus).

    It would eliminate the K-1 hassle and trying to determine cap gains on units you've held over a number of years, and avoid future tax time bombs.

    I say, the sooner the better!

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    • I see you all over the boards spewing the same cr%p. Even if you have valid points it is lost because it appears to most that you are nothing more then an agitator. When people like you keep pounding there message it gets to a point where nobody takes you seriously.
      As a kid you must have taken a lot of beatings for your annoying personality. Your abrasive, repetitive and it is obvious that you have no life.

      Go away little boy

    • I see you all over the boards spewing the same cr%p. Even if you have valid points it is lost because it appears to most that you are nothing more then an agitator. When people like you keep pounding there message it gets to a point where nobody takes you seriously.
      As a kid you must have taken a lot of beatings for your annoying personality. Your abrasive, repetitive and it is obvious that you have no life.

      Go away little boy

    • "You've got to just ignore this noise. "

      You mean..like what they did in Canada a few years back..just ignore it, huh?


      No, if I lived in Canada and invested there I wouldn't have ignored the noise because it wouldn't be noise. Just a small point. This is the United States, a different country, with a different history, past and especially present. It cannot be proven that what happened in Canada has any relevance to the United States. What was real in Canada may just be noise in the US. God Save The Queen and God Bless the United States.

    • why would one want to suffer a financial detriment to avoid paperwork that software handles simply and can be tracked with little effort

      rlp you may not have been involved in the Canadian royalty trust massacre. it may seem trivial to someone on the outside and that everything turned out okay but if you were involved in it, it was not trivial and things still are not settled because those still paying decent dividends are using carryover tax pools that will be used up in few years, then what, plus most of those companies that lowered dividends as c corp and re directed funds to growth still have not recovered to pre massacre prices sucah as pwe and pgh

      give me the paperwork and I will keep the financial benefit

    • The article is correct. IRS tax law treats all units in an MLP as one large FIFO pool. It doesn't matter which lots you tell your broker to choose. The K-1 will still apply FIFO.

      That author knows a lot more about MLPs than you. He was around on this board years before you showed up but now mainly posts on Investor Village where he is one of the most valuable contributors.

    • Did I get on the GE board by mistake?? Don't think so, but it sure sounds like it.

    • PS

      I ascertained from the mistakes you made in basic economic theory that you did not have a background in economics. If you do indeed have a minor in economics I suggest you apply for a refund immediately!
      You such an amusing person. Pride goes before the fall buddy.

    • See attached spreadsheet.

      Assumptions:
      Original share cost: $10
      Original distribution: 10%
      Distribution increases by 10%/year
      No taxes first eight years, after which cost basis reverts to zero.
      Sell in year fifteen..you are better off if you pay taxes from your original basis than if you defer taxes.

      http://seekingalpha.com/instablog/384258-rlp2451/178910-are-mlps-worth-the-trouble

    • does that mean you Believe in double taxation?

      Tax it once when the corporation generates profit, and tax it again when the individual is given a smaller (deduct taxes at least) share of the profits?

      Do you realize that the "dividend" will be smaller than the "distribution", (all other things being equal).

    • Uncle Sam will not end up getting any more money. The same folks who are demanding this are the very same that gave all the environmentalist special interest corruption to GE which enabled them to post $5 billion in profit and pay not a penny in taxes.
      It really is a time to do a Reagan. Government is going to step out of the way and encourage investment. Most especially in our massive new multi-generational energy wealth.
      Yes the MLP can covert to corporate structures. But it is a waste of huge amounts of money to comply. Managements will be worried about complying with the whims of folks like Pelosi and Franks rather than getting American more energy. Jetting back and forth to failUfornia on a government jet Pelosi wants the little people to use less energy, not her.
      Just leave it alone and let people work – hard – as they are doing now. Without this American GPD would be negative.

      As usual the ramifications are for all INVESTMENTS - not just MLPs.

      • 1 Reply to norrishappy
      • For selfish reasons, I would not like to see a change in the taxation of MLP's. In that the rules were in place when I made my initial investments and I made decisions according to existing rules, I would feel somewhat cheated. But, it would not be the first time in history that government pulled the carpet out from under a particular group of investors, and I would take my lumps and move on. I don't actually expect to see these changes occur any time soon, if at all. But, to believe they are not on the negotiation table along with everything else is naive. There will be winners and losers, as always.

        If all of the sudden MLP's were subject to taxes at the prevailing corporate rate, the Treasury would in fact realize a sudden influx of tax revenues. I don't understand the argument to the contrary. Distributions would be taxed as dividends, and if companies suddenly ceased those distributions, then the retained profits would be subject to corporate tax rates. This why the concept is so appealing to Treasury at the moment, because there is simply not enough revenue to cover expenditures. They will look under every stone for pennies. In the longer run, you could make the argument that it would be revenue neutral. But, I think right now most in government are thinking shorter term. If they don't plug the holes, there will be no longer term, at least for politicians as individuals.

        The comment about GE is gratuitious. They were dragged through the mud by NYT based on their tax return for one year, rather than looking at their tax profile over a number of years. Furthermore, the reason that they paid little in taxes had to do with severe losses at GE Capital, not "environmental special interest corruption". As the company stated (paraphrased), a financial crisis is not a sustainable tax avoidance strategy. I suggest actually reading their financial statements for a few years before concluding that GE has somehow sidestepped their obligations.

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