I think this is the time of year when roger goes primitive at his cabin in the boonies.....where he wash himself twice a month in the lake. The greenies will be after him for polluting local waters, just like scco. In any event, he's not missing much.
Holding a C corp is not a passive activity. The disposition of KMP in the exchange is treated as a fully taxable sale. It will trigger deductibility of suspended passive losses.
This assumes, of course, you were not dumb enough to elect to combine KMP with another pipeline MLP ( such as ETP) to constitute a single activity. If you did, you do not trigger KMP's suspended losses unless you also sell all of your ETP in 2014 (assuming KMP closes in 2014).
First, your child could be subject to kiddie tax......kid's tax calculated as if income on parents' tax return.
Second, suspended passive losses get added to basis in the case of a gift, but basis in the hands of the donee cannot exceed fmv on date of gift. In the case of KMP where a total sale is contemplated, you end up converting an ordinary loss (triggering suspended ordinary losses) into a reduction of a long term capital gain in the hands of the kid.
Nice try, but the feds are way ahead of you on this.
Collected 444.4 thru 8/14 vs 434.0 thru 8/11.....10.4 million in 3 days.....ave of 3.467 per day
Healthcare on fire this month.....396.2 thru 7/25, so 75.2 million in 20 days....ave of 3.76 million per day.
Too bad nsam didn't raise their estimate of 2014 with their Aug presentation materials. Oh well, they will in Nov, by which time they will be reasonably sure where the year will end. Always better to underpromise and overdeliver than vice versa.
If you sell your entire interest in a fully taxable transaction to an unrelated party (all of which are met in the proposed transaction), your suspended passive losses are deductible in full. The loss is an ordinary loss which will offset the ordinary income (Sec 751 gain) on the sale of your units.
Your ultimate net gain will be cash received plus fmv of KMI shares recived plus cumulative distributions received on these units minus cash out to buy these units. Much of this gain will be ordinary income. A very rough estimate of the long term capital gain portion (assuming you have held all units more than one year) is with absolute unit price. To illustrate, if you paid 75 per unit and receive 100 per unit, your long gain is in the neighborhood of 25 per unit. The balance of your gain is ordinary income.
As to when to sell, if the trading price is substantially higher than the exchange consideration, go ahead and sell.
The rub is you won't know what the value of KMI is until very close to the exchange date.
Don't know what I did wrong. Fidelity posted today at 54.4255. Anybody else get a discount drip posted?
Please post cost per share here to 4 decimal places.
Zacks = junk. Of course earnings estimates are down. DUH, NRF just executed a deal to pay nsam 150 million per year in management fees beginning 7/1. Do you suppose profits will go down when expenses increase?
I believe tomorrow is deadline to file reports. NASDAQ website still showing 5 pages of tute reports dated 3/31 or prior.
This one could be full of errors due to split/spin which took place at 11:59 pm on 6/30. I suspect these reports will show positions as of close of business 6/30, so shares reported will be pre-split and pre-spin. After all, the earliest they could be posted to any brokerage account was 7/1.
NASDAQ summary looks pretty foolish.....198 million shares out with tutes owning 283 million.
Site shows Thornburg owning 350K of nsam. Well, those had to be when issued if nobody booked the spin shares. I suppose all but stragglers will be posted early next week. Will try to make some sense then, but suspect we have to wait until Sep 30 report to see which tutes are holding/dumping which stock.
I use specific identification for the lots I sell so if I sold today's drip lot, the gain, if any, would be peanuts.
In any event, I hope ETP doesn't pull a KMP deal, which just kills my 2014 tax plan. I planned to die with both to get the step-up in basis. Half that plan has been shattered by Kinder.
I own no mutual funds. I own small amounts of VNQ (reit index) as a marker and a small position in RXR for international real estate. Together, these are about 3% of the portfolio. The rest is common stock.
I started stock investing over 30 years ago with nothing but equity mutual funds because at the time I was just beginning to learn about stock investing. As I gained more knowledge and experience and paid some "tuition" for mistakes, I gradually moved the portfolio to individual companies. I am responsible for my own destiny and that's the way I like it.
I own no preferred. The only significant position I ever had in preferred was NRF-A where I had a weighted average cost of 6.99 (and a yield on cost of over 31%). I sold all the retirement account preferred after 3Q 2010 earnings release which was full of flim flam (my opinion words) from the CSE cdo. I kept 2,000 in the taxable account because I had over a triple, but sold those after the 2010 10-K was filed because of the phony (my opinion word) accounting for the newly consolidated VIEs. Today, IMO, once one decides to risk money in NRF, the only place to be is common.
I have never owned bonds because I believe they are, over a very long term, losers to inflation and equities.
Yup, a trader can make lots of money trading bonds and swings in interest markets if the calls are correct. I don't have that skill and have no interest in learning it. My investment horizon is infinite. 80% of my portfolio is old and cold. I'll only sell if something bad happens to the company or its industry.
Notwithstanding the above, what's feels right for me may not fit the next guy, or the next. It truly is different strokes for different folks. That's why so many different investment vehicles are available.
Well, I can't resist a same-day 5% profit. I already know exactly how many shares I will get even though Fidelity won't post them to my account until next week. I could sell the drip shares today and pocket 2.80 per share vs yesterday's close. I wish I could make 5% same-day on all my trades. If I could, I'd be sitting on my 300 ft yacht instead of posting here, so I take the gimmees when they are offered.
I did not say I believes there is less risk to nsam. To the contrary, until they show two or three quarters of operating results, especially the first in Nov, I believe it will be very volatile and is selling well below what it will sell at once it shows some historical numbers
As to nrf, I expect the most rapid gain will come from getting the yield down to 7% or so. Thereafter, its rate of cad (and price) growth will be much slower than nsam's. One billion of new nrf common equity will not be accretive until return on leveraged equity exceeds 11.5%. Once over 11.5%, accretion will be minimal as a percent of 1.64 current midpoint cad. On the other side, one billion of new nrf equity adds 6 cents to nsam's cad from a base midpoint of 66 cents.....almost 10%. The griffin deal initially adds nothing to nrf's 1.64 yet it adds 6.6 cents to nsam's cad....10% on 66 cents.
Even though I think the total return on nsam will be at least double that of nrf in 3 years, I am a yield investor. I want dividends growing by at least inflation. The price of the portfolio is meaningless to me except for ego and estate tax purposes. NSAM is for my kids and grandkids. NRF pays for my winter extravagance in the Florida Keys.
You're right on 158.2 thru 7/23. My eyes get bad at the end of the day. I had this on my score sheet as supplement 6. Now this date and amount is in supplement 7, the preface to which says it replaces all prior supplements.
So, income 2 revised.....172.7 thru 8/11 vs 158.2 thru 7/23 = 14.5 in 19 days = .763 per day.
Business days is more accurate, but I'm generally too lazy. In can make a big difference over short periods, like 6/28 thru 7/8 which included 4th of July holiday. But over a longer period, say a quarter, it has less impact on the average.
BTW, 1Q = 150 million in 90 days = 1.667 per day
2Q= 208 million in 91 days = 2.286 per day
So far 42 days into 3Q = 111.6 million = 2.657 per day
The trend is our friend to finish 2014 closer to 900 million than 800.
Income 2 collected 172.7 million thru 8/11 vs 153.2 thru 7.23....14.5 million in 19 days....ave of .763 per day.
Healthcare collected 434.0 thru 8/11 vs 369.2 thru 7/25....64.8 million in 17 days....ave of 3.81 per day.
The average of the daily highs and lows for the 5 trading days ending today is 57.093. Thus 95% x 57.093 = 54.23835 which the ETP drip administrator will round to 54.2384.
I am willing to bet that three years from now the total return (dividends plus price appreciation) on NSAM will be at least double the total return on NRF. I expect this because the deck is stacked in NSAM's favor, the new honey pot from which the bigshots will take incredibly outrageous compensation in the form of free shares.
Yield investors....NRF is the place to be.
People who want price appreciation at the cost of current yield, NSAM is the stock to overweight.
Looks like I wasn't the only one expecting an offering by Tuesday night. We'll call this the no-offering rally. It has a long way to go, imo.
I believe Hamo is pulling his hair out and spitting nails over NRF's yield at over 9% when a blend of peer companies in different sectors indicates a yield of 6%. 1.60 at 6% = a price of 26.667, and here we are at less than 18. Hamo wants to split the dividend by assets......75% equity and 25% mortgage. I think it is more appropriate to split the dividend by sector cad.....I'm guessing at 60% equity reit cad vs 40% mreit.
If I am in the ballpark with 60-40, then 96 cents of the dividend comes from equity reit operations. Capitalize that at 5% and you get 19.20 for the equity reit dividend. 40% x 1.60 from mreit cad = 64 cents. Capitalize that at 10% = 6.40 for the mreit dividend. Thus 19.20 + 6.40 = 25.60 combined price. And here we are at less than 18....more than a 30% discount to where it should be.
If the 5-year rule prevents a tax free spinoff of healthcare or the mreit business is too small to stand alone, Hamo can issue tracking stock. Internally (which is already done) separate NRF into two divisions......equity reit and mortgage reit. Then issue a tracking stock for each division. NRFE = equity reit division. NRFM = mortgage reit division. One share of NRF is surrendered in exchange for 1 share of NRFE and 1/3 share of NRFM. The dividend for each tracking stock is determined solely by the cad generated by each division.
This can also be done by just issuing E and M stock. Then NRF = sum of both divisions, E = equity reit division and M = mortgage reit division. Then the price of NRF will trade at only a tiny discount or premium to the sum of the prices of NRFE and NRFM......the arbitrage people would see to that.
So Hamo has more than one way to skin the cat. Trust me. Hamo HATES the current price of NRF. He WILL do something about it.