I have used up my tax basis on my KMP units and it looks like my tax preparer characterized my distributions for 2010 as a long term capital gain which was then offset by my tax loss carry forward. If I read this correctly, I didn't have any tax liability on my income received because of the losses I took in 2008. My question to the board is if this is the correct characterization? It certainly helps me out in my tax planning and reinforces the notion that KMP is a position that should never be sold.
I will be looking into a tax change in the future but had a tax issue in 2009 that needs resolved, not my error (irs paperwork not current), should be resolved soon. I will only be in MLP's in IRA account from now on starting in 2012. Thanks to you all for the tax tips. Terrible KMP has dropped so much the last few days but I will be selling my shares in my taxable account before years end.
Not sure about your tax consequences but I noticed this year that tax accountant did a foreign tax form for the taxes on 64 shares income and just to do the form cost me 50 dollars, I also had to pay taxes on the income for 2010 on these shares. I will have to do the same for 2011 since did not know about form till after taxes done and had received distribution in January so will have to do the same for 2011. I will be selling my shares in my taxable account since not good tax sense to do this. I have most of my shares in this company in my ira account. Had 2 options called away on ex-dividend date at 70 dollars which has never happened before on KMP just doesn't seem fair even if I know it is the way it is. This is the only stock have over lost on ex-dividend ever. Just wish would have bought back seems like good long term investment.
I gave up on it in a non IRA account a couple years ago, got tired of the tax forms and problems. I hold it in the IRA, not reporting at all to do, you give up a little on the LP tax break but it is well worth it to me. I will never hold a LP in a non-Ira again.