In spite of the positive articles the last few days (mostly rehashed news), this tax situation has me concerned.
The company states LNCO shareowners will receive a 1099 on dividends. Ameritrade states they could be taxable. I am not a great tax person but this would be awful news if correct. The Line/Lnco disparity has me concerned that the tax situation might be as meaningful as the "weak hands" of Berry shareholders explanation. Could this be a residual of the SEC investigation? Not a basher, very long (for me) LNCO.
Why would it be awful news if LNCO's dividends were taxable? If you wanted the perceived tax benefits (and also the paperwork hassles & K-1 form) of an MLP, you'd want to hold LINE instead of LNCO. If you want to simplify your tax filing (but pay income tax on the portion of the dividend that is not returned capital) then hold LNCO.
In practice, it appears likely that virtually all of LNCO's dividend will be return on capital. My understanding is that this lowers your cost basis proportional to the amount of the dividend, but is not reported as a taxable income stream. The only place I see the tax treatment of LNCO being a problem is in a Roth IRA- once your cost basis is adjusted to zero (which would take about 10 years), further return on capital may negate the tax advantages of the Roth (if your holding is relatively large). Of course, you can always sell, wait for the wash sale period to expire, and buy back in.