Fri, Nov 28, 2014, 3:39 PM EST - U.S. Markets closed early today

Recent

% | $
Quotes you view appear here for quick access.

Kinder Morgan Energy Partners, L.P. Message Board

epholder 64 posts  |  Last Activity: Nov 27, 2014 12:09 PM Member since: Dec 4, 2002
SortNewest  |  Oldest  |  Highest Rated Expand all messages
  • Reply to

    newbie question no more K-1?

    by sick_ofthe_system Nov 26, 2014 1:21 PM
    epholder epholder Nov 27, 2014 12:09 PM Flag

    Pain like we've never felt before. Figuring out how to actually report all the carryover losses, etc., and then writing the big check to pay the tax. Oh, I can envision two or three red thumbs down already. No, its a holiday, so it will take a while, if ever.

  • Reply to

    7.9% chose the cash election

    by epholder Nov 25, 2014 11:31 AM
    epholder epholder Nov 26, 2014 11:08 AM Flag

    Why settle for $39.53 per unit when they can't sell immediately for $43.47? EPB has been well above $40 for quite some time now.

  • Reply to

    KMP election considerations:

    by clydorn Nov 25, 2014 3:17 PM
    epholder epholder Nov 25, 2014 10:12 PM Flag

    Holders of 7.9% of the EPB units made the Cash election and will receive $39.53, when the units closed today at $43.05. I don't understand why Kinder Morgan offers these election choices. They are just a trap for the unwary, most likely senior citizens whose thinking is no longer that sharp. No one wins big with these kind of choices, but the most vulnerable can lose significant amounts.

  • Reply to

    How to Value Converted Shares?

    by sugarfox98 Nov 23, 2014 2:35 PM
    epholder epholder Nov 25, 2014 2:52 PM Flag

    Logically, yes you can. Otherwise the KMP units would go to zero value before trading ends.

  • Sad. They should have gotten advice from someone first.

  • Reply to

    Exxon to aquire KMI OHHHHHHH Myyyy

    by chefabg123321 Nov 25, 2014 9:46 AM
    epholder epholder Nov 25, 2014 11:18 AM Flag

    Exxon management has to focus on replacing its oil and gas reserves. KMI won't due anything for Exxon in that regard.

  • Reply to

    How to Value Converted Shares?

    by sugarfox98 Nov 23, 2014 2:35 PM
    epholder epholder Nov 24, 2014 9:00 PM Flag

    You are referring to the number of shares to be received. The question in this topic is what is the dollar value of each of those shares? We will find out on 11/26 I believe.

  • Reply to

    How to Value Converted Shares?

    by sugarfox98 Nov 23, 2014 2:35 PM
    epholder epholder Nov 24, 2014 2:41 PM Flag

    No, the cash paid out in the merger is considered sales proceeds, not return of capital. Fractional share cash is sale proceeds too.

  • Reply to

    How to Value Converted Shares?

    by sugarfox98 Nov 23, 2014 2:35 PM
    epholder epholder Nov 24, 2014 12:55 PM Flag

    This question hasn't really been discussed much on the board. Kinder Morgan will announce what the conversion price is, and it will have to be within the trading price range on the last day of trading. Your K-1 and possibly some other tax reporting forms will show what your sales proceeds were in the merger. That will consist of cash and the fair market value of the KMI shares you receive. You will know the number of shares you receive, and Kinder Morgan will assign their value at the closing.

  • Reply to

    Tax question

    by alexa266 Nov 20, 2014 11:09 AM
    epholder epholder Nov 23, 2014 8:15 PM Flag

    Hey, whoever gave the thumbs down for this comment, could you try to be articulate and say what it is about the comment that you dislike? Intelligent people do a lot of reading, you know. Just clicking on the thumbs down or making a face at someone doesn't help increase our understanding of anything. Good for emotions, but useless for intelligence. But who needs intelligence. You were born with the intelligence and knowledge that you have.

  • Reply to

    conversion price is $40.25

    by malagasysloth Nov 20, 2014 4:36 PM
    epholder epholder Nov 23, 2014 12:16 PM Flag

    Conversion price is $40.25? What does that mean?

  • Reply to

    Tax question

    by alexa266 Nov 20, 2014 11:09 AM
    epholder epholder Nov 23, 2014 12:12 PM Flag

    If a person had a $10 million investment in an MLP, then they probably would have filed form 990t for those years even though the UBTI was negative and the law only requires 990t filing when the UBTI is positive and over $1,000 cumulatively for the year. I'd apply those negative UBTI amounts even if I didn't file 990t's for them. The IRS has the K-1 for all those years.

  • Reply to

    Tax question

    by alexa266 Nov 20, 2014 11:09 AM
    epholder epholder Nov 23, 2014 12:04 PM Flag

    tppfan points out above that the MLP has been generating negative UBTI in all previous years for most investors, so those negative amounts should be offsetting the depreciation recapture UBTI in the year of sale. The negative UBTI seems to correlate to the ordinary business loss on line 1 of the K-1. The negative UBTI is found on line 20V of the K-1.

    So my answer immediately above was incorrect.

  • Reply to

    Anyone see this on the EPB website

    by free_10k_filing Nov 22, 2014 10:49 AM
    epholder epholder Nov 22, 2014 9:19 PM Flag

    Yes I did. The page your are viewing is over 2 1/2 years old. We cannot go back to 2012 without a time machine. To get current info, do a Google search of Kinder Morgan Investors and you will find no such outdated information. The info you are looking at discusses EP stock. We are dealing with EPB in the current merger.

  • Reply to

    Anyone see this on the EPB website

    by free_10k_filing Nov 22, 2014 10:49 AM
    epholder epholder Nov 22, 2014 12:40 PM Flag

    Your are looking at outdated information regarding El Paso Corporation's merger with KMI in 2012. Not info on El Paso Pipeline Partners. Info on the web sometimes never dies.

  • Reply to

    Tax question

    by alexa266 Nov 20, 2014 11:09 AM
    epholder epholder Nov 22, 2014 12:27 PM Flag

    Your IRA plan custodian (brokerage firm) might make the payment. That's what makes this issue so strange. I have been following this issue since 2011 on message boards and blogs and have never seen a posting or comment by any person who has actually paid the UBTI tax when they sold their interest in an MLP held in an IRA.

    There are plenty of tax experts writing about how the UBTI tax applies but none of them have ever actually paid the tax or even know exactly how it would be done. All theory for them.

    There are over a dozen large pipeline MLPs that have been trading for 7 to 10 years or more. Many of the investors have put those investments in their IRA's, and undoubtedly, many of those investments have been sold in those IRAs. Yet no one has ever come forward on a message board (that I am aware of) and actually said that they filed the trust return due to the UBTI tax.

  • Reply to

    Tax question

    by alexa266 Nov 20, 2014 11:09 AM
    epholder epholder Nov 21, 2014 1:08 PM Flag

    Trust tax rate is 39.6% on trust income over $11,950. Graduated rates begin at 15% for lower trust income levels.

  • Reply to

    Tax question

    by alexa266 Nov 20, 2014 11:09 AM
    epholder epholder Nov 21, 2014 12:58 PM Flag

    Yes, the threshold for owing the UBTI tax is $1,000. I think all MLP's owned by the IRA have to be taken into consideration in arriving at the $1,000.

    Partnership deductions (passive losses) will be important for investors who hold KMP units in regular taxable accounts. But for investors who hold the KMP units in IRA's only the UBTI matters. Distributions received by the IRA don't really matter in the calculation of UBTI. I believe the calculation is essentially a calculation of the gain on the sale of each physical asset of the partnership (deemed selling price less adjusted tax basis of the asset). If the asset is sold for a low enough price, there's little or no gain, and therefore little or no depreciation recapture. Recapture only comes into play when there is a gain on the asset sale. So we really don't know what the K-1 is going to show.

  • Reply to

    Tax question

    by alexa266 Nov 20, 2014 11:09 AM
    epholder epholder Nov 21, 2014 12:47 PM Flag

    The tax has to be paid out of IRA funds because the IRA is a separate entity from the individual who owns the IRA. If you wrote a check from your regular checking account to pay the UBTI tax, it would be a prohibited contribution to your IRA, assuming that you are not making a new contribution to that IRA in 2014.

    That's right, the payment won't count toward the required minimum distribution.

    At this point we really don't know how bad it will be. Kinder Morgan will allocate the purchase price among the KMP assets in accordance with what the fair market value of those assets are. Some of the older pipelines may have generated large depreciation deductions but the pipes now have little value without being reverse flowed, or repositioned to handle another kind of product. Such pipelines might be sold at no gain at all, and consequently, there is no depreciation recapture on those assets.

    The IRA will be taxed as a trust, at trust rates, and I don't think there is any low bracket rate for trusts. I'll check.

  • Reply to

    Tax question

    by alexa266 Nov 20, 2014 11:09 AM
    epholder epholder Nov 21, 2014 10:59 AM Flag

    I don't know if that 66% figure would hold true for very long term investors. The distributions received over the years really don't matter regarding the UBTI issue. Its strictly how much depreciation was assigned to the investor over the years. And I believe that it is only to the extent of capital gain on the deemed sale of physical assets of the MLP that matters. Its not the entire depreciation expense. New assets are not fully depreciated.

    Capital gains are taxed at ordinary rates to the extent of depreciation recapture. So I wouldn't try to guess what the recapture amounts are going to be. I regret writing that the tax won't be huge. I would hate to have to pay it.

    Keep in mind that the law, and the application of (any) law in this matter is not completely settled. The IRS has not come out with any announcement or ruling on this topic. So investors should wait and see. Don't assume the most detrimental position.

    KMP is so huge, and its the first roll up of any large publically traded MLP. So it might become a test case. Wait and see. Wait for the K-1 and wait for more clarification and (conflicting) opinions from tax experts.
    http://seekingalpha.com/article/312281-master-limited-partnerships-and-your-ira?page=2

Trending Tickers

i
Trending Tickers features significant U.S. stocks showing the most dramatic increase in user interest in Yahoo Finance in the previous hour over historic norms. The list is limited to those equities which trade at least 100,000 shares on an average day and have a market cap of more than $300 million.