bought BPT in 01. sold when it was high, Did get divided short time. just finished my taxes for last year. Not sure why anyone would own this for the long term. hope you all know they take 55% of the divided back for administrative expenses. So a 10% dividend will only get you 4.5% in the end. I like LNCO better you pay straight income and only lose 1% over qualified.
Wow, you are totally confused. The 10% (current yield) is the net amount after deduction of admin expenses.
BPT tax is pretty simple : distributions = royalties - admin expenses
And then you can claim a depletion deduction to lower your taxes.
Sorry, it sounds like you are doing your taxes wrong.
not so . my CPA, a very sharp one at that. depletion yes but in the end admin expenses eat to much up. I would be further ahead with LNCO. That was just the example I gave him because the divi was about the same.
I bought it in '04 @ $34/share and am collecting more than $8/share per year in royalties. I've already collected more than $75/share in dividends, more than twice what I paid for it. It could go broke today and I still come out sharply ahead. That's greater than a 25% annual return for my individual situation along with a $50/share equity position. There's not many legal schemes which have a return like that. I just wish the rest of my investments could have done as well.
Same with me... I bought in at $58 in 07. I've reinvested my royalties and at this point my cost basis is like $32. I'm going to stop reinvesting soon and take the cash. I wish I put in a lot more at the time. The yield at my cost basis is beautiful.
I suspect there are some principals who got their foot in the door with this trust at an early stage (possibly some BP executives and bankers) and have also gotten themselves into the enviable position of being hired as paid 'consultants' or something equivalent. Although the net payout to the unit holders is considerably higher with BPT than with other trusts, the ratio of the amount paid out in 'administrative fees' is utterly astronomical compared to the other trusts and investments I've held, which average only a few %. The full nature of these 'administrative fees' (i.e. exactly who is getting what) has never been fully disclosed and this is the only thing I can think of. If it wasn't for this, BPT would be paying 30-40% a year!