I believe if you sold everything short term, everything would be taxed at ordinary rates, both the dist and cap gain.
From the NAPTP info, out of the IRA. I've always wondered whether ord gain recapture at sale of the units would be considered UBTI. Not sure, never owned an MLP in an IRA.
If the IRA’s UBTI from all sources is over $1,000, the fund custodian will have to file a return and pay tax on the excess out of the IRA’s funds. Most advisors feel that unless there is reasonable certainty that the net in
come received from MLPs will be less than $1,000 each year, it is better not to hold them in an IRA. This is equally true of regular and Roth IRAs.
Except if the cash causes the downgrade of your credit rating. I got the impression, maybe wrong, that WMB wanted a cash portion in the deal. And wasn't the original deal 1.87x with no cash, this has been strung out so long, hard to remember all the nuances. Today, I think a 2x swap would get the deal done and would be good for the combined entity a couple of years from now, and I'm assuming oil gets back to th $60 to $80 range, and the shales are still growing.
I own both ETE and WMB as well as ETP and WPZ. Never have shorted a stock, not smart enough to do that. Go back and forth on what is best, merger or standalone. In the standalone camp today but as ETE moves up, will be easier for deal to get done. ETE could be forced to merge or buy their way out. Today, also think WMB is undervalued relative to standalone value. If market perceives deal is still on, then can't see how ETE doesn't back up. And on top of the deal is the prospect of oil retracing to $30s, seems more remote but you never know. And ETE trading up on dist, if the merger is forced, dist will be eliminated, what will investors pay for a no dist co for a couple of years.
The more strength ETE shows, the higher the probability that the WMB merger goes through, value over $29. And then the dist gets cut for the next two years. Brent pushing $50. Not sure the market is discounting the risk that the deal is forced.
trader, I went back and looked at UBTI on k1a and it seems that in some MLPs 1231 gains are included and sometimes not. I want to say that I am not a tax accountant and don't know definitively but generally is best to keep MLPs out of IRAs. Does seem that units held in a taxable account, the tax liability will be there for the ED deal. I think your advice to check with a CPA is a good one. Talking about tax implications is difficult.
WMB owners will get $28 in the merger so they are in a good position with ETE moving up. The WMB board is determined to get this done.
Would delay some but the longer this goes, imo, the stronger the oil market gets and the easier the combination gets. I have guessed that oil could be $75 by end of year, my guesses aren't any better than anyone else, but $60 to $80 takes away a bunch of uncertainties. And would make this probably a barn burner co in a couple of years. $45 WTI today. PXD says it will start adding rigs at $50. By the end of the year, we could be behind the demand curve without more drilling. This stalling of the deal has been helpful for both cos no matter what happens.
You are exactly right, the higher oil goes now $45 vs $26 low, the higher the equity values, the more likely this merger gets done. Seems WMB is the better value today. An equity swap 2x would solve a bunch of issues, no dist cut, no more debt. Warren gets what he wants, gives up somewhat more equity but the payoff could be big in a few years with the best franchise in the industry. I think I was 75% deal dead to 50% today. Oil to $50 and even more reason for deal to get done. No need for the conv pref plan, no tax opinion issue.
Meister with Corvex, board member, he has a lot riding on this, rep and money. He thinks the ETE maneuvers are just noise to get deal killed. I agree, Warren doesn't want to give up the better growth at ETE for the merged growth. Each side is dancing and I'm not sure what they really want and where it comes out. Today, i think a 2x exchange, all equity, would work and both stocks go up.
The institutional holders will vote for the deal, they own 85% of the shares and don't care about the dist being eliminated. Today, the market doesn't see it happening, but it's back on, the stock prices will get banged up with the deal back on and no dist. The higher the prices go, the more of a dip. You can't exclude that possibility.
Also, keep thinking they could get to a all equity deal at 2x, could maintain the dist, grow some. Conv pref plan would be scuttled, no issue with the tax opinion. I think I'd vote for a 2x exchange, with comm prices recovering, combined co would look good in a couple of years.
Does feel that we have bottomed but I still think there is a chance of another short term dip. But who knows. PXD says they will adding rigs at $50, not too far away. And that's what the midstream cos need. There were some incredible values a couple of months ago. The ETE deal, the market thinks it is history, again, not sure there isn't some probability it happens, but the market is not discounting much at the moment. Still think ETE is worth $14 and WMB $28. We'll find out more with the q reports.
I sense the WMB board is bent on seeing that the merger happens. And they just might succeed, although a billion dollars from ETE might soften this position. I can't imagine the tax opinion holds this up, all of the sudden it can't be accomplished, what changed. Still think calling the whole thing off is good for both sides considering the environment, although oil moving to $50 would move the whole sector up more. PXD said they will adding rigs at $50. Does change the economics of the whole deal. A simple all equity deal at 2x would get it done, no dist cut and growth. Otherwise the dist will be eliminated. Seems the longer it goes, the more chance of a merger.
Seeking Alpha. Consider the source. Anyone with a computer can publish there. The vast majority of the pieces are inaccurate and irrelevant.
The piece said ETE couldn't come up with the $5 billion, that's not even right, the loan is already committed, try reading the articles, not the headlines. SA is a notch below a Yahoo message board.
ETE value is $14 and WMB is $28. Both will appreciate if the deal gets blown up.