Very unlikely to hit 2 cents on Monday. Very likely that it will eventually go to zero. New equity will be issued to the senior debt holders and current unit holders will get nothing but a tired hand.
The only reason to buy BBEP common units is to close a short position because you are too impatient to let it go to zero after the bankruptcy. After all, what's another 10 cents, when you've made $20 on the downside?
That is wrong. Please don't give advice.
If you currently own LINE units, tell your broker that you want to accept the exchange offer for LNCO shares. There will no doubt be a small fee for the exchange.
If you used TurboTax, you would not need to ask any of these questions. Just enter the data it requests and it will populate all the forms you need. Done.
Thank you for helping me to clarify my thinking on this. It seems like the right course of action is to sell it and deal with the ordinary gain and the capital loss. Doing the swap introduces variables that are needlessly complex and perhaps without much advantage. Who needs that? lol
So if I understand you correctly, if I sell today I will have ordinary income (recapture, etc.) and a huge capital loss which I can use against other gains. If I do the swap, I will have COD income that is reported as a capital gain, but the basis I have in Linn will not transfer to Linnco, so in effect I will lose the benefit of the capital losses I have on the books. And you're right: once I sell this thing I am so out of here. Not looking back to Linnco. Ever.
Thanks. That is all interesting information. I, too wondered how Linn management can do the swap and suggest that the COD won't adhere to the new shares. It seems like a deliberate attempt to avoid taxation, so that would be a red flag. God help us if we swap and find out we have COD and Ordinary gain!
I used Tax Package support to plug in my own information. It is a reasonable question as to whether that is a useful tool or not, but what else is there? I could make a reasonable guess based on my own records, but I wouldn't believe myself. lol.
As far as getting guidance from Ellis and Company, I think I've had about enough of their guidance. Less
Making the swap is a conversion to a corporation from a ptp. That will trigger ordinary gain. So, the question is whether the ordinary gain tax is worse than the tax on the COD you get if you don't swap. Given that there's almost 10B in debt, that's a lot of COD compared to ordinary gain - at least in my case.
Assuming debt of $10B is forgiven and 355M share outstanding, that is $28.73 per share in COD, or $28,730 per 1000 shares. The ordinary gain on 1000 shares is considerably less, again, at least in my case.
I'm not an accountant, so maybe my numbers are wrong. If so, I'd appreciate a second opinion. If, I'm right, the decision is fairly easy.
It's a nice thought, but I don't know why it would bounce on a failure of the merger. Look around at ETP and EPD. They've been reduced to ashes, too. In fact, if the deal is canceled, I give 50% odds the units do down further.