Did not see any price on the announcement. This is kind of unexpected coming so soon after the offering in December, I don't know whether to be upset or upbeat.
You should see what was said in the press and by the people when they were coming after SS. You are a kid today, wait till you see what the government can and will do when you are in their gunsights.
In my opinion the government will go after tax shelters like carried interest, LLC's, partnerships, Reits, passthroughs and MLP's well before they go after individual retirement accounts. In fact I think that IRA's, 401K's and Roths will be the absolute last place they come after.
what if I throw AWAY MY K-1 next year..lol . We have some dummies in the IRA/Washington anyway..Might take them 10-15 years to find the issue/or me..
Seriously I will respond later..I am all screwed up now..thanks guys lol, and I was happy making money up and until yesterday lol
If you are really successful in your investing you will find that putting MLPs in an IRA is a bad move. You also will find that contrary to the sales pitch by the government the RMD from your IRA will probably put you in a higher tax bracket than if you never opened one in the frist place. In addition it will probably push you up to the level of paying taxes on 85% of your SS and maybe even involve you in reaching the dreaded AMT level. All these events will probably not allow you to itemize deductions. I've been there. Done all those things. It's not what you bargained for years ago when you opened that IRA. I can also tell you that if you are successful in your investing you will pay more taxes after you are retired than you probably paid while working.
Also not to rain on your picnic party--Don't be surprised when the day comes that the government decides to tax Roth accounts. They did it with SS, why not with Roth Accounts?
Since every dollar you put into an IRA is deductible from your ordinary income, every dollar you withdraw from an IRA is taxable as ordinary income, never as capital gains. The principal value of IRAs is this ordinary income tax deferral feature--you get a deduction today for moving your money from one of your pockets to another and you don't owe any tax until you return it to the original pocket.
IRAs do not allow you to convert ordinary income, which is taxed at higher rates, into capital gains, which are taxed at lower rates. Thus, many people pack their IRAs with high dividend stocks that may have less prospect of generating a capital gain. I have stocks like NLY, D and EXC in my IRA, but not AAPL, which is in my taxable account.
MLPs do not pay income taxes, they make distributions out of their distributable cash flow (DCF), which is not the same as net income (see Alerian's MLP Primer to understand this essential difference). Typically, a significant percent of those distributions is a return of capital, since depreciation is one of the elements added back to arrive at DCF. Although they reduce your taxable basis, returns of capital are not taxable, so from a tax perspective, the last place you want to put an MLP is in your IRA. MWE has good prospects of appreciation, so that is one more reason to keep it in a taxable account--all that appreciation would be taxed at ordinary income tax rates when you withdrew it.
Purely from an income tax perspective, there are other reasons to avoid putting MLPs in an IRA, and no good tax reasons for doing so.
to the people who follow this philosophy about mlp.s not to be put in IRA. If you had 1 million dollars in a IRA and was single you would have to be 93 years of age to be required to take $100,000. If your wife was younger then it would be less. I hope all want to live to 93 and take out 100K that year.
My comments: Please tell me what stock to put into an IRA if not mlp's.? The line of reasoning proposed is insane. IRA's are for retirement and generally to supplement SS, Savings (presently less than 2%)and housing (prices for homes generally collapsed. The insane premis is your IRA will grow and you will have to pay taxes on the distribution. Well if it grows and it is an investment and it is taxed at retirement rate MOST BLUE CHIPS are at 10 year ago prices so where is the growth? The assumption is ludicrus. You have IRA money presently, then you have to put that money to grow in your IRA . You have brokerage money and you have to put it into something ., It is not the same money.The smartest focus is put your money into a roth IRA if you have any brains. Please the genius who writes this nonsense -Ask them what stocks to put into a IRA?
>>>I talked to TD AMERITRADE this morning, and their thoughts were if I am in a IRA acct I only will be taxed on my withdrawals, not my profits that go into my account. I know nothing about taxing on a MLP..any help would be welcomed..probably older than most, but young pup when its comes to MLP's. Again tired of the up's and down's of normal stocks..I hate to lose lol <<<
The advantages and disadvantages of investing MLP's in IRA's has been discussed many times.
IMHO investing MLP money in IRA's are wrong because you lose all the tax advantages of investing in MLP's by doing so in an IRA. The distributions and growth will bloat your IRA and when you reach 71 1/2 and have to start taking RMD (Required Minimum Distributions) out you will be pushed into a higher tax bracket and probably have to also add payments on 85% of your SS and maybe also be required to pay AMT (Alternative Minimum Tax) Of course the more successful you are the more horrendus the taxes become.
If the MLP investment is made in a taxable account you just might be happy in receiving ever increasing distributions for the rest of your life and leaving the MLP units to your heirs. By doing that, the cost basis of the units will be stepped up to the then value and their are no tax consequences to anyone.
There is a lot more to investing in MLPs than investing in stocks. MWE distributions are about 80% to 90% tax deferred. That means the last distribution paid was .76. If 80% is deferred taxes will have to be paid on about.152 . If your tax bracket is 15% that will mean you will approximately pay .0228 and have .7372 of that distribution to spend or buy additional units or save. And if you don't have a need to sell there is no other tax to be paid by you or your heirs.
Think about that before you listen to TD Ameritrade (By the way, they are my broker also). The person you spoke to at TDA doesn't have a clue as to what I'm saying
this is how they grow. They sell units or issue debt. They take the money and build infrastructure (processing plants, pipelines, compressor stations, a 200 railcar rail yard etc.) They collect, process, distribute and ship the fluids on long term contracts. The profits are distributed in mostly tax deferred increasing distrubutions to the unit holders. Here is a link to MWE's past history of distribution payments from the IPO in 2002 to now
I've been through this many times and IMHO it is just business as usual. A time to buy on the dip before it continues on higher whenthe projects currently being built are completed and become operational.
The price has not been announced yet.
It's not unexpected to me.
I am upbeat
I'm expecting MWE to use the additional money wisely, as they have done in the past, and they will continue to pay me increasing distributions every 3 months as they have done in the past.