EPD, ETP, MWE and most other midstream MLPs increased their distributions. Don't understand your thinking but that is OK. The reason for the combination was WPZ was not going to increase their distribution for about 3 years where in the merger we also got a bit of cash to offset the payout decline and the new WPZ wil increase its payout at about an 8% annual rate.
WPZ is a Master Limited Partnership and does NOT pay a dividend. It pays a distribution. VERYVERY different. Would suggest you go to national Association of Publically traded Partnerships and do some reading. You pay taxes using WPZ's K-1, not a 1099. Lots of other differences. You might not want to keep this OR you might want to add more. K-1s cost about $50 extra for a CPA. TTax handles them fine, but it is MUCH more complicated with recapture of depreciation on sale and other things.
skinz - FYI EPD price done the same as ETP - "The price for authorized but unissued common units purchased with reinvested distributions will be the average of the high and low trading prices of the common units on the New York Stock Exchange—Composite Transactions for the five trading days immediately preceding the investment date, less a discount ranging from 0% to 5%. The discount is initially set at 5%."
It is effected by volumes on NG and NGLs along with NGL pricing. Those are moving all over and EPD is moving up and down daily but net is about even. I do not even look at it unless a longer term trend.
I note that trading MLPs is sort of scary as you get a K-1 and there can be some nasty suprises there. Remember EPD allocated to the partners monthly - not quarterly
Your cost did not change. You paid$35400 for your original 700 shares. your cost basis moved over to the 606 you now have. SAME cost basis. As fin=shin said WPZ was going nowhere. With the combination you are likely to have good distribution increases going forward.
Mike - The comment that you do not pay anything on the K-1 numbers is what is SCARY! The K-1 reports often some income, interest, gain on sale of property, dividends and other income numbers. I pay my taxes on every dollar - not every dollar over $1K. you are talking about IRAs.
As to keeping track of your numbers, you cdrtainly need to know your passive loss carryforward number. The K-1 will automatically calculate everything else.
PS - After you basis goes to zero you owe taxes! Using turboTax is great and keeps track of everything. it puts the numbers where they go. Report off the K-1 - you will not (should not) get a broker 1099 DIV. Also check your K-1 to make sure they have your purchase price correct. Lots of mistakes on K-1s. Also some REALLY BAD INFO in this thread. Posters confusing IRAs with taxable accounts and others having no idea about K-1s.
Go to National Association of Publically Traded Partnerships and read their primer on MLPs.
What is upsetting about the price action in ETP?
ETP does have some commodity exposure and issues with profits from processing and fractionating. But they are not huge. ETP has also had a 52 week high of almost $70 and a low of $53 so at $58.50 we are right in the middle. Almost no price movement at all. Both Regency and ETP hedge their commodity exposure. also the oil they transport in pipelines is transported for a fee. Neither company ever owns that oil. The fear is that production and thus the fees earned for transport will decline. There is some basis for that in the medium term, but demand for oil and NG continures to grow.
The French will buy from anyone. Would guess Germans and Dutch etc would tend to prefer buying from someone that does not turn off the pipeine every few years. US, OPEC countries and Australia can sell gas at competitive prices. Australia is locking up much of the Far East demand that should have gone to Russia. Would guess big push on US suppliers to send to europe. also we sort of get SA by default
Coal is certainly not going away. The decline in coal is very gradual - your numbers showing decline in the 3% annual range. NG should have reduced differentials once we finally build out a network. Also in NE lots of homes still using heating oil and connections increasing but many places not available for NG.
As to Russia - The big deal is going to be LNG and if Europe can get enough supplies to cut the NG cord with Russia. With Putin there, Europe would certainly rather deal with the devil - oops they already do! - than Russia. The problems of what Putin is trying to create seemingly are only going to escalate.
The issue becomes the screaming from cumsumers if we have $5-6 NG versus about $2 coal generation. LNG exports will raise prices in US and equalize prices a bit more worldwide. Have figured my elctricity bill would almost double if utility switched from coal to NG.
Why? I can show you several other midstream MLPs down more. MWE concern is the producers and their ability to simply stay in business. MHR and others are simply and quickly running out of money. MWE also continues an agressive buildout and will there be NG/NGLs. Also MWE has lots of commodity exposure as they disclosed. This starts to really kick in as the cannot really effectively hedge going forward. The problem is ethane is not worth processing until 2016 or beyond and thus most MWE contracts are fixed fee but thought to contain option for producer to opt out of all but the necessary minimum. MWE has not been very forthcoming is discussing contracts and the what ifs in a $50 oil and $3NG environment. Got to remember MWE has gone nowhere in the las years unit price wise and with this the liklihood of higher CAGR for distributions, well . . . . . . .
Skinz - The availability depends on the employer. I could not find any Roths available at any employers either large private or 403b public. The reason I would guess is an employee can simply contribute to the regular IRA and roll the money almost immediately into the Roth. The public and private guys do not want two different sets of IRA books.
I am now in a higher tax bracket than when I was working. I also think the stepup in basis is going to at the very least be reduced to $1M.
tp - And that answer works unless you are like Chuck powell and all of your available $$ are already inside a Traditional IRA. I agree putting a tax shelter inside a tax shelter loses much of the benefit, unless the tax shelter grows at over 10% a year.
Are you serious? ETP and RGP already had the same GP and that there would be consolidation was announced over a year ago. Agree mergers/buyouts are coming but this one suggests only fulfilling a statement made a year ago. The E&P area should have some interesting buyouts.
Exactly what I said. The point you missed is that I contributed to a 403b for some 20 years at the maximum rate allowed. Converted/rolled into a IRA at retirement (15 years ago) and now am steadily converting. When I was working and contributing 11% to my state retirement fund, 7.5% to Social Security and 25% to my IRA I both needed the deduction and for a time the was no Roth. My wifes IRA is now totally converted and mine is about 1/2 done.
We completely agree that for those that accumulate a large amount of savings an IRA is NOT a saving for taxes. most of my income is from notes I carried back on the sale of a business. I elected out of the installment method and paid the tax on the present value of a restricted note the first year. Now it is mostly principal and no capital gains!
Cramer who? MMP report was GREAT for 2014, but expected DCF guidance is DOWN for 2015. Looks like we take a breather this year with MMP DCF for a bit.
skinz - I am in the position where my income is too high to contribute to a Roth IRA. however, I have over the years worked to steadily convert my traditional IRA into a Roth. This was done bit by bit in any year when my income was down a bit or I could move $$ into one year to make another lower. The issues for the poster is that his money is ALREADY in a traditional IRA. Thus where to invest those dollars. For those few that put away a larger portion of thier earnings into an IRA , a traditional IRA will actually increase your tax bill.
Where you are not correct is in stating the 98% of the population would be better in a Roth. Half the population pay no income taxes. HALF! Thus these would certainly be better taking a deduction and continuing to pay no taxes and they are certainly not likely to pay and on retirement.
The merger date is 2/3 - Will take probably 2 days for the data to get to the brokers. They needed to send youer units to the clearing house electronically yesterday. Takes a day or two to make sure all is correct before transmitting them back into your accounts. Patience.
If you are going to use midstream MLPs you need to invest this year before the corporate buildout of plants on the Gulf Coast makes ethane and NGLs have incremental value again.
I do not that UBTI is completely unpredictable and EPD had one year iabout 10 years ago with a big UBTI number (about $2 per unit). Do note that buying a "little" EPD is not likely to teach you anything or maybe nothing until you get your K-1. Again the K-1s vary a lot from year to year. Also FYI - there is talk (getting more meaningful) of making ownership of MLPs inside IRA (particularly Roths) illegal. Depending on your age doing a roth is the most vlauable becuase taxes likely to be higher rate wise in the future.
chuck - I presume you only have $$ inside an IRA. Correct? If this is the case a couple hundred units should not be an issue for UBTI. skinz is correct that putting a tax shelter inside a tax shelter defeats much of the benefit of EPD.