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Linn Co, LLC Message Board

pshonore 10 posts  |  Last Activity: Dec 16, 2014 10:22 PM Member since: Mar 8, 2006
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  • Reply to

    Tax loss selling

    by haa6451102 Dec 15, 2014 3:21 PM
    pshonore pshonore Dec 16, 2014 10:22 PM Flag

    You guys need a basic MLP tax course. Distributions LOWER your basis (so do operating losses, depletion and intang drill costs). Operating income increases your basis. When you sell, your adjusted basis is subtracted from sale proceeds to get total gain. The MLP will tell you how much is taxed as ordinary income (due to recapture of depreciation, depletion, etc). The balance cap is gain/loss. The key is there is almost anyways ordinary income which cannot be offset by the cap loss.

    LNCO is not an MLP - it pays a dividend that will probably be ROC. That means not taxable but received but it also lowers your basis. However when you sell your gain is all Cap Gain - no ordinary income

  • Reply to

    tax loss sales

    by fatdog12413 Dec 11, 2014 2:56 PM
    pshonore pshonore Dec 11, 2014 7:14 PM Flag

    Sorry, that's incorrect. When you sell, you can use specific id to pick any shares you wish. However if you sell ANY shares at a loss, and purchase replacement shares in either the 30 day period before the sale or thirty days after the sale, you have created a wash sale. You don't get to take the loss at that time but can use the loss to increase the basis of the replacement shares meaning the loss will be delayed until you sell the replacement shares

  • Reply to

    tax advice please

    by colonelflashmanvc Dec 3, 2014 1:28 AM
    pshonore pshonore Dec 4, 2014 10:46 PM Flag

    On the K1, take the number in Box 1 and subtract from it the number in Box 13J and the number labeled 20T1 on the bottom of the State Schedule. If the resulting number is negative, you most likely owe no tax except on the interest of $95. If the number is positive, you can deduct any prior year unallowed losses (for the same MLP) to reduce it to zero.

  • Reply to

    Shorted share suprise!

    by marionpolk2000 Dec 2, 2014 9:58 AM
    pshonore pshonore Dec 3, 2014 1:26 PM Flag

    For everyone who thinks this is an urban legend - YOU ARE WRONG. TD Ameritrade loaned shares of a Muni CEF of mine to a short seller. They also gave me a payment that matched the dividend plus made up for the taxes now due. Actually this is not a problem for a C-Corp (LNCO) or a CEF. Much bigger problem for LINE and other true MLPs

  • pshonore pshonore Nov 7, 2014 1:45 PM Flag

    I've owned VNR since 2008 and have had "substantial" amounts of UBTI in most years ( $1.25 per unit) At that rate, 800 units would put you over the $1K limit. Mine is held in a taxable acct so its not a UBTI problem, but that does mean I'm effectively paying tax on 1/2 the distribution. Not a big deal because you're going to pay tax sooner or later and that reduces the taxes due on sale big time and spreads it out. It also keeps your basis from getting to zero which causes distributions to be taxed as received (as LTCG) By the way, UBTI differs for everyone.

  • Reply to

    Question on X divi

    by wvwvwv12399 Oct 9, 2014 12:08 PM
    pshonore pshonore Oct 13, 2014 12:05 PM Flag

    Generally that means in order to collect the 10 cent dividend that TRN is paying on 10/31, you had to own the stock at the close of business on 10/9 (the business day prior to the ex-dividend day)

  • Reply to

    State Taxes

    by vkerscher Jun 12, 2014 1:33 PM
    pshonore pshonore Jul 14, 2014 11:29 AM Flag

    You are supposed to file a return in any state where your net income is greater than the filing threshold. Buts its not that simple. Some states allow a deduction for Intangible Drilling cost and Depletion (like Federal taxes) while others do no). On my VNR K1 the biggest amounts of income were in OK and CO (approx. 20 cents/unit in OK and .15 in CO) and that's before any allowance, if applicable, for depletion and IDCs. Last time I looked the filing threshold was $1K of income from OK sources so unless you owned more than 5000 units you probably were not required to file in OK but everyone's K1 is different so don't take this as tax advice for your situation. Also, your residence state (assuming it has an income tax) will usually give you a credit for taxes paid to another state but its a complicated subject and involves lots of paperwork.

    My biggest problem is the Federal tax; I've owned VNR since 2008 and more that 50% of my distributions are taxable. On the other hand, that means my basis is not dropping much; so the tax bill upon sale will be less than for some other MLPs.

  • Reply to

    Income tax reporting

    by rogerwenman Mar 25, 2014 4:11 PM
    pshonore pshonore Mar 26, 2014 11:10 AM Flag

    Are you sure Box 14 is filled in? I've not seen an SDR K1 but I do have one from Permian (PER) which is organized the same way where income is classified as Interest and Royalties (although it comes from Texas). I don't really see how those could be classified as SE income. And probably somewhere around 75% of the distributions are effectively taxed because of the depletion, etc so you may get money back if you reported them originally as non-qualified dividends and file an amended return which you should do.

  • Reply to

    K1 gain calculation

    by circuitest1 Mar 17, 2014 6:02 PM
    pshonore pshonore Mar 18, 2014 11:43 AM Flag

    B is correct; you add the basis adjustment to the cost (but adding a negative is in effect subtracting)
    Cost + Basic adjustment = basis
    6000 + (-2000) = 4000
    Sale proceeds - basis = total gain
    10000 - 4000 = 6000
    total gain - ordinary gain = cap gain/loss
    Ordinary gain goes on Form 4797; cap gain/loss on Sched D via Form 8949

    If you're unsing Turbo Tax, be careful; they've changed the input of this stuff

  • Although the 2013 tax booklet is not yet available, it appears the depletion factors for 2013 have been entered into the online depletion calculator at the PBT website. However when I enter a lot that I sold in March 2013, it comes back with negative depletion for the Waddel Ranch oil properties and positive depletion for the others. That doesn't make much sense to me. Anyone have an opinion on negative depletion?

    Also depletion is about about 1/3 less than last year. At one time PBT produced a net loss as depletion exceeded income but that is no longer the case. The depletion calculator is a good tool and makes it easy to calculate depletion (assuming it is working ok)

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