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Kinder Morgan Energy Partners, L.P. Message Board

clydorn 6 posts  |  Last Activity: Sep 4, 2014 1:13 PM Member since: Jun 24, 2004
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  • Reply to

    Why the fall?

    by gabby2705 Sep 4, 2014 9:47 AM
    clydorn clydorn Sep 4, 2014 1:13 PM Flag

    You had to look within the 2nd qtr report which states "The ex-dividend date has been set to September 4, 2014, record date is September 8, 2014 and payment date is on or about
    September 18, 2014." You have to scroll down to page 11 for the paragraph labeled "Quarterly Cash Dividend". You can also just check "stock information" under "Investor Relations" where the amount & dates are given.

    Yes, you had to go looking for it this time around. Those reporting on the earnings release just did not take the time to peruse the report for this dividend info. I checked thier website after a previous poster mentioned it was there. Guess I'll have to do that more often. Also, just recently showed up on some broker sites.

  • Reply to

    KMR vs KMP

    by beethovenspint Aug 28, 2014 3:15 PM
    clydorn clydorn Aug 29, 2014 10:55 PM Flag

    Yes, it will be interesting to see what shakes out. Thanks for your thoughts & the points you made.

  • Reply to

    KMR vs KMP

    by beethovenspint Aug 28, 2014 3:15 PM
    clydorn clydorn Aug 29, 2014 10:44 PM Flag

    Well, I think we are on the same page. Yes, I agree that there is virtually no difference between holding KMR vs KMP upon the conversion as far as taxes within an IRA acct so I see no advantage to selling KMP to buy KMR at this time. The difference will be insignificant in the final analysis. The gains from holding either stock will be protected within the IRA.

    As far as UBTI is concerned, we don't know how much would be assigned to this conversion for KMP. Regardless, even if he sold his KMP now, he would still be subject to any UBTI applicable for the no. of months held in 2014. And with the cash received with the KMP swap any UBTI will be insignificant. I was merely trying to point out to him that their no advantage in making the switch at this time as the Capital Gains Tax is a non-event in either case. So any capital gain due to a reduced Cost Basis is not a concern as it is protected within the IRA, as that is it's purpose.

    If an investor holds an MLP in an IRA & that MLP generates income that qualifies as UBTI, the MLP holding MAY

  • Reply to

    Tax Implications ?

    by homebrew01 Aug 17, 2014 4:02 PM
    clydorn clydorn Aug 28, 2014 6:30 PM Flag

    Your KMI basis would be computed as follows: (based on your example)
    50 KMR shrs @ $40 = $2000
    50 KMR shrs @ $50 = $2500
    Total KMR investment = $4500
    Your KMR basis is $45 per share ($4500/100).
    Your KMI basis on conversion will be: $4500 / (100 KMR shrs x2.4849).
    or: $4500 / 248.49 KMI shares = a KMI cost basis of $18.1093 per share.

    Turbo Tax will not do the KMR to KMI conversion for you as it will merely ask you for the cost of your KMI shares & the selling price.

    You don't need to pay someone to do this, it is very simple: Remember that your cost basis equals the total cost of a particular stock purchase divided by the total number of those shares purchased,. As has previously been mentioned, be sure to include any brokerage fees incurred because they are part of your stock cost. Your broker 1099 should convert your KMR cost basis to the converted KMI cost basis for tax purposes because they will realize that you now have a new amount of KMI shares converted from KMR with a KMI cost basis based on the costs of those KMR shares converted.

  • Reply to

    KMR vs KMP

    by beethovenspint Aug 28, 2014 3:15 PM
    clydorn clydorn Aug 28, 2014 3:50 PM Flag

    You ask: "I have a substantial holding of KMP in my IRA. Is there any advantage of getting out of Kmp and into KMR now ? ....... NO, BUT HELL NO! Why would you even consider it? Your KMP dividends have been accumulating tax free in your IRA. As a KMP holder you will receive 2.1931 shares of KMI for every share of KMP you own; additionally, you will receive $10.77 cash for every KMP share you own. Your KMP holdings are currently in a tax deferred acct if in a traditional IRA. You will have no tax liability in such an acct until you begin to take distributions which are required when you reach 70 years of age. If in a Roth IRA you have no requirement to take out at any age & no tax consequences when you do take a Roth Distribution.

    You are in the Cat Bird seat. Previously many who held KMP in an IRA were criticized for putting an already tax-advantaged investment into an IRA. Ha Ha, now who is having the last laugh.....you are! You should not receive any 1099D from your broker. You will have not tax consequence because your KMP is in a tax deferred acct. You will receive a load of cash which will be tax free to invest as you so desire. Your new KMI dividends will accumulate tax free in your current IRA acct. SO, WHATS NOT TO LIKE?

    This being said, every investors situation, goals & interests differ so there are no hard & fast rules for everybody. But, based on what you have presented, I think you should just sit tight & hope that the price KMI goes up. KMI will pay a $2 dividend next year with a promised dividend increase of 10% every year for the next 5 years. Also: if you have held KMP for a long time then your cost basis is probably quite low. Use this cost basis to figure out your projected gain on your future KMI dividends as your conversion cost basis will be considerably lower than the current market price of KMI, thus increasing your original investment yield.

    good luck to you, enjoy your just investment rewards.

  • Reply to


    by sksnickerdoodle Aug 25, 2014 1:30 PM
    clydorn clydorn Aug 26, 2014 12:01 AM Flag

    Yes, they will be converted on the, yet to be announced, conversion date. There will be no immediate tax problem as you are not receiving cash for the conversion, but only shares of KMI for shares of KMR as it is basically a stock-for-stock corporate acquisition. If you sell your KMI then you may be subject to any applicable capital gains tax on your profit. After the conversion any KMI dividends will be taxed unless held in a tax deferred account.

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