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Kinder Morgan Energy Partners, L.P. Message Board

  • robl45 robl45 Feb 27, 2006 8:16 AM Flag

    KMP Tax Question

    Since I get a K1 for KMP, do I need to report the gains and losses under schedule D as well? Right now I have KMP with all my other stock trades, do I delete it out of there and just add the the info for the K1 to my tax return?

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    • Billyjoe call home right away!

      Your village put out a APB, cause it is missing its idiot.


    • My hand is up...... I bought about a year ago for the dividend, collected the dividends with a smile, and now I plan to sell all 218 shares. I am not sure I made a profit, other than dividends, since last year.

      When I took out my RTN dividends, I told Fidelity don't "touch" that KMP stock, I don't want any K-1 forms coming my way. "They said it's listed as core cash in my IRA, not as KMP"... oh good.. I said, send it my way.

      Will pay my tax as regular dividends, and rip up any K-1 forms that comes my way. I plan on pleading ignorance if Uncle Sam comes looking for me, let then figure it out. I'll simple say sorry! my mind is not as sharp as it used to be... think they'll by it.

      That's my story and I'm sticking to it... lol

    • Thanks a lot for your info.... I really appreciate both inputs. Planning on selling the stock next week.
      Hate to do it, but have upcoming taxes to pay.

    • >> How did you post "return of capital" in past years? Are you referring to Turbo Tax or to a tax form? <<

      I referred to posting in the books of my S-Corp. You are right, ROC does not go anywhere else. Reduces the distribution to income.

      Have much of my investments in an S-Corp because I was worried about missing the 2-year window on selling the NY area residence after 27 years, a 9-fold gain. 12 years ago. So I bought the FL retirement home with an S-Corp I set up and rented it. When my first wife passed away and I finally sold the NY house and moved, I bought the retirement home from myself (from the S-Corp) - within the 2 year window. Paid $ 300 for the advice: "related party" don't matter.

      Thanks for the clarification. Will get around soon to fudge my returns :-) Are you on ValueForum?


    • This is the response (on page 17) to Wulff's analysis by KMx.

      "The percentage of KMP�s debt to its total capitalization at June 30, 2005 was
      approximately 54%. The percentage of KMI�s debt to its total capitalization at
      June 30, 2005 was approximately 39%. If KMI were to consolidate KMP, as Mr.
      Wulff proposes and as will be required pursuant to U.S. GAAP commencing
      January 1, 2006, KMI�s percentage of debt to its total capitalization would be
      approximately 55%."

      Compare this with this report by KMx:

      KMx announces that debt will be 65% of capital in 2006 *after selling additional KMP units.* The interest coverage ratio will be a miserable 3.3x. Notice how KMP's interest coverage ratio goes from 5.6 to 3.3. Also notice that the combined company, with $1.583 billion in capex this year, has a 3.3x interest coverage ratio which is lower than KMP or KMI individually. How does that happen?

      KMx is of course an oil production company with with over $500 million on its bank line pledged to cover commodity hedges and a miniscule 3.3 interest coverage ratio. After capex of course interest expense is not covered. KMx is using share sales and bank lines to pay interest on its debt. What happens when share sales stop? What will the stock price have to be to sell additional shares?

      The elfin sprite Kim Dang certainly has her work cut out for her trying to keep this teetering tower of debt out of bankruptcy. It's a good thing she has a lot of experience as a CFO. Oh right she has none!

    • an easy soln? Could i ignore my K1 form and pay capital gains on the increase in share price and the dividends? I am not seeing the forest through the trees here, and i am in need of some help.

    • thanks for the reply, but does that mean that the 13T1, 13T2, 13T3, 13T4, 13V, 15U1,10Q1,20Q2, (listed as STMT information) does not apply to me because I was in and out in four months?

      KMP says on their website that they will not populate my tax forms with this information because I show a net loss (despite the fact that I sold at a profit).

    • I think you're reading selectively. My post 10725 mentioned the possibility of ordinary income recapture on cash distributions, but said that partners won't have the necessary information to calculate this amount unless the MLP gives it to them (which they don't).

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