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Nuveen Real Estate Income Fund (JRS) Message Board

hungrydoggy 2 posts  |  Last Activity: Jul 31, 2014 9:03 AM Member since: May 23, 2008
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  • Reply to

    Help please

    by the_pinner2000 Jul 30, 2014 4:17 PM
    hungrydoggy hungrydoggy Jul 31, 2014 9:03 AM Flag

    LINE is a limited partnership. LNCO is a corporation. As I understand it, the two are separate legal entities.

    LNCO is managed by LINE. LNCO has only one operation. That one operation is that it owns LINE partnership shares. Each share of LNCO is backed by exactly one share of LINE. When the time comes to pay the distribution, LINE pays a distribution to LNCO for each share of LINE that LNCO owns. LNCO then pays the income tax, if any, on the distribution, and then re-distributed the distribution as a corporate dividend to their share holders.

    Figuring income taxes with a limited partnership like LINE is a real pain. LINE sends you a form K-1. For me it takes me at least half an hour for each limited partnership I own and it is difficult and confusing. For that reason many investors hesitate to buy a master limited partnership. But if you buy LNCO your dividends are reported to the IRS just as normal corporate dividends, you get a regular form 1099 just like any other corporate dividend, and you report your dividend like any other corporate dividend on Schedule B.

    Because LNCO pays income tax on the LINE distribution before they pass the money on to you as a dividend, it is possible your dividend could be lower than the LINE distribution. But right now they are the same. In a perfect market LINE and LNCO would trade within a few pennies of each other.

    I hope this answers your question.

  • Reply to

    Good buy at $26

    by btsoi7715 May 9, 2014 3:29 PM
    hungrydoggy hungrydoggy May 9, 2014 4:36 PM Flag

    Good buy at $40 a share. At $40 a share the yield is 7.2%. The current share price of 28.37 is sheer lunacy.

    Current price is fine by me. I'm buying more shares with each monthly distribution and each time the share price goes down too far. If someone is dumb enough to sell me a stable well run oil company with a 10% annual distribution yield at this price I'm happy to buy.

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