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Eagle Rock Energy Partners, L.P. Message Board

  • jersey27fan jersey27fan Mar 11, 2012 3:35 PM Flag

    EROC K-1's

    First an overview and confession - EROC is one of 8 MLPs I own, and by far my smallest in terms of the amount I've invested.

    Given the above, I confess I spent almost no time last year following the machinations of the partnership. So I have no excuse for being surprised at the significant drop in my "capital account" - Box "L" on the K-1.

    In my case the 2011 decrease amounted to almost 23% of my "Beginning Capital Account".

    I also receive distributions from EROC last year - and since I found other uses for those and did not reinvest the funds received, those distribution also resulted in a reduction of my capital account. Between the inherent decrease in the value of my units plus the distributions I received, my capital account diminished about 35% in 2011.

    I've owned EROC in this account since August of 2010. When I annualize what happened for those five months in 2010, both distributions and account decreases were significantly smaller in 2010 campared to the results in 2011.

    If this keeps up, my basis in EROC could be at zero by 2014, assuming no reinvestments.

    Next - a couple of questions for "the board" -

    Will it keep up?

    Or, was there a one-time event in 2011 that had a significant negative impact on partner's accounts, something I won't see in 2012?

    Also...

    All of my MLPs were in tax-deferred accounts prior to 2010 - so I don't know what the tax consequences of distributions received when my basis in the partnership are at zero. Is it possible that distributions will be considered "ROC", and thus, in my case - since I owned the assets since 2010, be taxed at a LT Cap Gains rate?

    Thanks for your help...

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    • Im not a tax expert but that drop in the capital account sounds high. Especially since it appears they had the net income to cover the dist so should not be a ROC. Maybe it has something to do with the warrants exercised and units issued. There was a 35% increase in units issued in 2011 but only discount if any (warrants went for $6 strike?), should impact your cap account ....seems stange...if u find out post it up

    • Hi, Just updating this message to see if anyone can give a ballpark figure on the UBTI amount per share(I know it will vary year to year). I bought 10,000 shares this past week in my IRA and wondering if that will generate UBTI over the $1000 limit. Thanks,Tom

    • Does anyone have a reference for advise on tax handling when held in taxable account? I seek help.

    • hmmmm....I just got mine too. Since I hold this in a 401k, I am not knowledgeable about what that section is saying to me. I recall reading that the distributions would not be taxable, if held in a 401k, and if under $1000 (and they are not).

      Are you saying the ending capital account becomes the basis for profit or loss when you sell it ? (mine shows a 75 % reduction). Perhaps it is a moot point since I hold it in a 401k and everything gets taxed at the same effective rate in there..

      any comment would be appreciated.

    • That's what happens when you buy low. I'm in a similar situation with XTEX.

      "Is it possible that distributions will be considered "ROC", and thus, in my case - since I owned the assets since 2010, be taxed at a LT Cap Gains rate?"

      My understanding is that "distributions in excess of basis" are indeed taxable as LTCG. However most of the specific questions I have about the reporting of it have gone unanswered.

 
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