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B&G Foods Inc. Message Board

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  • strum_this strum_this Nov 11, 2009 9:29 AM Flag

    SO WHAT !

    Yeah, my biggest investments currently are in pipeline Master Limited Partnerships (MLPs) that have very little exposure to commodity prices, but are exposed to the general trend of the growing discovery of large natural gas resources in this country. I personally own EPD (for its size/liquidity and friendliness to unitholders) and DEP (for their stable business model and relationship to EPD), but there are a host of others in this space (KMP is another of the larger, more liquid ones).

    These investments pay a tax-deferred distribution yield of 7-8% currently and the companies have performed reasonably well throughout the economic disaster of the last 18 months. The only downside is that tax reporting is somewhat more complicated with these investments. They are partnerships, so the payouts are treated as a return on capital that reduces your cost basis. The company sends out a form K1 every year that summarizes your fraction of the business for you, and that you report to the IRS. But you don't pay tax on any of your earnings until either the total of distribution payouts you've received exceed your original cost basis, or until you sell your units. If you are handy with TurboTax Premier you can get it done without too much fuss, and in my opinion the payoff is well worth your time to learn about the tax issues.

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    • >>biggest investments currently are in pipeline Master Limited Partnerships (MLPs)

      Yup. I've dome some of that (San Juan, Amerigas, others) sort of moved away from them and from Canadian Royalty Trusts. I try to stick to preferreds and recently CEFs. Also left bank stocks (a slippery lot) and auto mfgs.

 
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