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Enterprise Products Partners L.P. Message Board

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  • businessguru75 businessguru75 Nov 17, 2012 11:02 AM Flag

    Why the Gain at this Time???

    You need to educate yourself as to how your individual tax situation will be affected by a sale. It is not a simple capital gain situation as others have pointed out. This is why we saw selling the last few days, people see recommendations and simply hit buy without knowing what they are buying. This is also why traditionally you see some selling around tax time every year because for some reason their mind is blown by the k-1.

    Historically, all these chances have been good opportunities to buy more. I am very overweight in this but I still added at 50 and 49 as I would peg the price at 55-60 by the end of next year which represents a 15-20$ return on my money. Fine for me.

    A bit of free advice which is worth as much as you paid. For most people, including myself if you get to feeling that you have to sell, that you can't take the pain any more it's probably time to buy more. If you get to feeling that there's no way you would sell and start envisioning what you can buy with your profits one day, probably time to sell some.

    One last point which others have pointed out. These DISTRIBUTIONS will be unaffected by an dividend rate tax increase. As a long time holder of nearly 5 years and as someone who does his own taxes, I can attest that the distribution/k-1 has yet to increase my tax liability and one year I believe it was brought down. Now, when I sell, you pay the piper there, but for now any holder gets 5% pretty much tax fee until a unit sale.

    As for congress changing the dividend and/or MLP tax structure, keep in mind that those who set the rules set the rules for themselves. All these folks own high dividend paying equities and likely hold MLPS as it has proven to be one of the better sectors to be involved in over the last 5 years. They are not going to look to raise their own taxes substantially. What they will likely agree on is capping the mortgage interest deduction, depreciation on personal jets, things that affect the uber wealthy. And they will likely compromise on the capital gains and dividend rate somewhere between 20 and 25%, far from the end of the world. Keep in mind that the capital gains rate was as high as 70% during the Eisenhower administration to help pay for WW II. We need to pay for the two wars one day, might as well start no.

    Oh and if you think interest rates are going to to crazy anytime soon, keep in mind that if long term bond rates simply move from 2% to 4%, the national debt goes up 1 TRILLION dollars. Would u raise the rate on your own credit card if you owed a ton of money...no, so the FED will not... so the end game is BUY EPD.

    Sentiment: Buy

 
EPD
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