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Enterprise Products Partners L.P. Message Board

  • foxhsmart foxhsmart May 16, 2012 12:38 PM Flag

    Tax question for EPD distributions if tax rates rise in 2013

    Any thoughts on what the tax implications would be for EPD distributions if dividends become taxable as ordinary income in 2013? EPD pays distributions, much of which has been tax shielded for us, yet I am wondering if anyone here has given thought to whether and how the potential tax changes in 2013 may effect EPD and our distributions.

    If there is little change coming our way, this would likely be good for EPD shares as investors would likely shift holdings into EPD to protect from the dividend tax hit they may take on their other dividend holdings that would potentially be impacted in 2013.

    Fox

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    • The majority of women are not so stupid as to accept such electioneering tactics. They also do not appreciate being talked down to or being taken for granted. They do focus on moral character, something of which Romney seems to have a distinct advantage, having earned what he has through honest, hard work.

    • Your MLP will probable loose 50%

      • 1 Reply to esval
      • If MLPs go down 50% then what happens to dividend paying companies? Do they go down 70%. People need to invest their money somewhere. With CDs not a viable option for the next year then where?

        Suggest if Congress does the stupid thing - nothing - then dividend stocks get sold off, but MLPs would do better as they do not pay dividends.

        Everything would be hurt as many would have less income. Those who depend on dividends would be hurt most, many of those are elderly. Thier votes would maybe vote in a few new people in government.

        ARB

    • There are dividend taxes on etfs, since ETFS pay a dividend, not a distribution. A distribution is paid to a "partner", which is why there is a k-1. ETF holders are not "partners" in the underlying units the etfs hold, hence, no k-1's. So you do lose the tax deferred status on the dividends on the ETFs, the plusses are that you don't have to take as big a hit when you sell the ETF but there are fees as others have mentioned.

      I don't find the k-1s that hard to deal with though I see how if you had many k-1's it could become a hassle. Most people that own their own business use k-1's as well so it's not some sort of secret tax loophole where you need to be a CPA to crack and file correctly.

    • If dividends are taxed as ordinary income I expect many companies to stop paying dividends.

      • 1 Reply to cscomgr
      • A couple comments. The political bashing done in this discussion only hurts the board. PLEASE take it elsewhere. OK?

        Next, there is an issue with ETFs besides dividends and that is on forced sales ETF can incur capital gains and ordinary income that reduces their ability to pay out dividends. Add to that their expense ratio and you have a problem.

    • The problem with shirfting into EPD is many people do not want to deal with K-1s. It is also almost 100% that Congress will eventually do something. There are too many millions of elderly invested in dividend paying stocks to let the rate for dividends go away. Seems we are likely to go to 20% which is what both sides agreed to a couple of times.

      ARB

    • it would be unaffected by a dividend tax hike, 43% on the highest earners, but they could change the MLP tax structure. However, it is unlikely that congress will allow dividend taxes to move that high because a, their constituencies will point out there is no other place for reliable fixed income thanks to interest rates being so low and b, congress has lots of money in dividend taxes and mlps and those who write the rules write them to benefit themselves. I would bet that the capital gains rate and dividend rate will both be raised to a higher, but reasonable 20%.

 
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