I understand that ROC lowers my tax basis when I sell.
I do NOT intend selling NGLS any time soon.
I do have distributions from NGLS in 2009.
When I fill out my tax form do I have to mention ROC or just keep a private record of it to be used when I do eventually sell?
As other posters mention below, TurboTax Premium seems to handle MLP's quite well if you decide to do your own taxes. You can import data or enter it by hand fairly easily. I would not want to try to handle the taxes on several MLP's without TurboTax or a CPA. I have seen other posters mention that TaxCut does not seem to handle MLP's as well as TurboTax Premium. My experience has been that the rewards from MLP's are worth the hassle but I didn't get into MLP's until late 2008 so I have never had to go through a real down cycle. Good luck.
I agree with the PCA comment.I get peace of mind and a knowledgeable person to strategise with. Note, I am just turned 59, have a significant 401, and a small in home business, MLPs provide about 80% of my income so therer is a lot of timeing involved in my $$planning.
Best of investing luck!
Sorry can't advise except to ask friends and businesses who they use. $75 an hour sounds reasonable - I pay a fixed yearly fee that's too high but I can call at any time to get advice on investments or other financial issues. Because of her wide circle of clients she can give guidance as to what others are doing successfully.
Years ago I realized for myself that having an accountant reduced stress and sometimes reduced taxes. If I did them myself I'd still run them by some service. I just hand over my information and she does the rest. I don't work on my car either. -;)
Yes Dustin, maybe I should have done more DD, but I am up about 10% since 10/8/09 when I got into the Market. 10% might not seem like a lot to some, but that depends on how much one invests. Sometimes, I learn by the seat of my pants.
RiaiUS1, thanks, I did have a consult with one, but she charges $75 per hour and I was not sure if she was all that good. Any suggestions on how to find a good CPA?
There's plenty of info out there on the internet on tax reporting of MLPs. In general, you will get a K-1 which will list the distributions that you received. You will NOT get a 1099 DIV which is how dividends are reported for inclusion on your tax Schedule D. There is a website called something like www.taxsupport.net which houses many of the MLP K-1 forms. Once you enter that website, you select your particular MLP and insert your SSN and it pulls up your K-1 which can then be downloaded directly into TurboTax. Most MLPs participate, but there are a few that don't. As for the return of capital, your K-1 should include a reconciliation of your "capital account" which is basically the amount you invested in the MLP (your cost basis) reduced by the sum of distributions that you have received over the years, which should eliminate the need for you to track this separately. Finally, you report your share of the MLPs income as ordinary income (it's one of the boxes on the K-1 and once the K-1 is downloaded into Turbo Tax, it puts it into the proper line on the tax return. If the partnership has a loss, there are limitations on how you use those losses (I believe they can't be used to offset other ordinary income, but can be used to offset other passive income from other MLPs but).