It is not a dividend and should not be declared as a dividend.
Yes, the tax booklet is the correct treatment.
It is confusing the first time but not that complicated.
You will have OID interest, repayment of principal and royalty expenses.
The OID is a form of interest, so goes in the interest section (sched A ?)..
The repayment of principal would be on schedule D with basis equal proceeds.
The expenses would be on schedule E.
Turbotax is fine but you have to enter in the correct information.
You should not have to pay 30% tax on your MSB income.
Did you compute and enter the depletion deduction?
You probably did. What about depletion, did you enter that?
the broker report (1099) will change multiple times and still may be wrong in the end. They have never got my MSB correct yet as they don't seem to know the rule about holdings held for less versus more than a year.
ancient history and no longer relevant. The company is smaller and radically different now having divested its best and most reliable (in terms of cash flow) assets since then.
On top of which part of your return goes to pay their high salaries and bonuses.
You can do better with individual MLPs.
exactly, so you'd have to be paying 20% commission (buy and sell) if you had so little to invest that a split would help you.
How could you have lost half your investment? It hasn't dropped that much and you have also collected distributions.
The reason for the drop has been written about extensively here (transition from fast growth to minimal growth and also issues with assets being in the wrong geography considering new sources of supply). So no, quick turnaround is not going to happen. They already announced that distribution going to remain at current level for about 3 years.
Come on, it's 4 years now of no growth. Total return has been limited just to the distribution. For most of those 4 years they have been saying growth projects are in the pipeline. As for the 8% yield, well that is precisely because the market does not believe in the growth. If the market believed the growth story the yield would be lower.
Don't forget that total return = price appreciation plus yield and EEP's total return has been in the bottom quarter of all MLPs for 4 years now. They are a true laggard, consistently underperforning for years.
It is a fact, not garbage, that EEP has had one of the lowest total return of all MLPs for quite a few years. Sure, they always have something coming in the future but in terms of actual results they have been in the bottom quarter of all MLPs as judged on actual results (total return).
the trust lasts less than 20 years and decline rates are something like 70% in the first few years so the production tail and corresponding distributions are going to be much lower than initial levels. The main question is whether the steep part of the decline curve is already passed and production will level off from here or whether that is still in the future after further steep decline.
And another factor, this is shale. There is possibility that without ongoing fracking, the shale simply closes up and becomes impermeable, in which case production might just stop. I think your wells producing for a hundred years is far from applying to this type of source rock. There is possibility the shale becomes impermeable (as there will be no more fracking) and production stops a few years from now. I don't know if that will happen and neither does anyone else since this is uncharted territory. Your 100 years comment is obviously based on completely different type of wells in different geology.
Why? Many countries are closer to end markets (for example Australia and Indonesia closer to Asian markets, Qatar and Iran closer to European markets). What is so special about US NG? Remember closer means lower cost, so US is at a disadvantage on that point.
exactly, foolish to say nearly worthless. But it's not clear to me that it won't go down further considering it's going to be paying only 40c a year for at least 2 or 3 years meaning the yield is still way low. If you want to own this the buying opportunity is going to last a few years and may become better yet. So no hurry for anyone to rush to buy this.
P.S. There is a possibility we will find out the identity of the acquirer this week. If AAV's stake has in fact been sold (as another poster here points out, this is not fully clear) then the acquiring company would become a 10% holder and so be required to file disclosure. Deadline for that would be coming up soon.
"I would have thought going to monthly payout would make it stable and even more boring."
That has not been a result for any of the other E&Ps which switched to monthly payments so I did not expect it would work for ARP either.
I don't trade. I buy for income. I bought RPL when it looked like it finally hit bottom and I will only sell because the acquirer will not pay a dividend.
As for LNV, if the acquirer is Surge, Twin Butte or another dividend payer which I already own then I will sell in order to avoid an overweight position in the combined company.
If the acquirer is Torc, Longrun, Whitecap or Cardinal I will hold for the income as I don't have any position in those as yet.
I hope the acquirer is one of the latter (with buyout price in the $6's) as it will be an entry into one of those names at a yield better than I could have got by taking a position directly.
You can go back literally years on this board and find my posts arguing that limiting speculation in commodity markets leads to lack of liquidity and greater volatility and reduced supply. Now mainstream media is coming around to that conclusion especially in the wake of position limits imposed by CFTC last year leading to lack of liquidity in futures markets for oil and gas resulting in producers unable to hedge and therefore being unwilling to increase production.
Bring back the speculators or face lack of supply and increased prices ahead.