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# Kinder Morgan Management LLC Message Board

• fountain123_45 fountain123_45 Dec 21, 2013 10:26 PM Flag

## KMR distributions

KMR gives distribution in additional shares rather than cash. How are these new additional shares created? Does the Market Cap of KMR increase every distribution and Market Cap of KMP reduce by the same amount? Yahoo shows Market Cap of KMR @ \$9.08B and KMP @ \$34.7B. Could this be the reason why KMR trades at discount to KMP?

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• How are these new additional shares created?

In essence Kmr shareholders receive the newly created shares from Kmp. Richard Kinder explains, search Youtube on my name, "Cashflow retained."

• And how do you calculate cost basis when you sell ??
If I buy 100 shares at \$70, then 1 share when the price is \$74, and 1.1 share when the price is \$80 (simplified example).

Then 2 years later, with 112.25 shares, when the price is \$90, I sell all the shares, and have been getting fractions at various prices every quarter ... what the heck is the cost basis ?

• 2 Replies to homebrew01
• The cost is the original cost basis of the shares you purchased. The stock you receive is treated like a stock split and have the same purchase date as your original shares. You can adjust the purchase date (they were never purchased, they were received) to your original purchase date at Fidelity. Call Fidelity and they will explain how.

• \$700 dollars on the first lot.
\$74 dollars on the 1 share second lot
\$80 on the 1.1 shares in your third lot.
If these were new purchases.

But if you only made one purchase one time, and the additions were Kmr dividends from the first lot. The cost basis is \$700.00 for the 112.25 shares.

On the books you have \$700.00 invested in the 112.25 shares. The basis of your cost, the full cost of your Investment was \$700.00.

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