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The Coca-Cola Company Message Board

uhlerf 6 posts  |  Last Activity: Jun 24, 2014 5:42 PM Member since: Jul 23, 2010
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  • Reply to

    KMP AND KMI

    by cborkar Jun 22, 2014 3:06 PM
    uhlerf uhlerf Jun 24, 2014 5:42 PM Flag

    then why is the full name of KMI "Kinder Morgan 'Inc' " ?? (its not a corporation??)
    (disclaimer: not owner if either KMI or KMP, but considering buying one or the other)
    p.s. anyone know if any part of dividend from either of these companies is "return of capital" (ROC), as opposed to "regular" dividends???
    p.p.s. anyone know how ROC is advantageous investing strategy, since it lowers cost basis???

  • Reply to

    kmi or rig .....or both?

    by mwalk65 Jun 23, 2014 9:56 AM
    uhlerf uhlerf Jun 24, 2014 5:22 PM Flag

    wuz gonna ask a question, but I guess I need to get permission first from the question police - where do I find them???

  • Reply to

    Bad Mood on the Right

    by walrathcraig550 May 15, 2014 8:03 PM
    uhlerf uhlerf May 16, 2014 8:26 PM Flag

    Oops: II was "I".....

  • Reply to

    Bad Mood on the Right

    by walrathcraig550 May 15, 2014 8:03 PM
    uhlerf uhlerf May 16, 2014 8:24 PM Flag

    not a "noun" -- "ing" makes it a verb ('course Il could be wrong - just a retired metalshop teacher) (on the other hand, any spelling or grammatical error makes the whole concept questionable, no?)

  • 1. How come everyone is surprised at a "dividend" cut, when they're not really being paid a dividend?? Did anyone notice that last year's "payout/yield" (2013 1099) indicated that 64.7% of the "dividend(yield)" was NOT a real dividend, but was comprised of YOUR OWN money being returned to you?? ("return of capital")
    My 1099 called it "non-dividend distribution (irs box 3)".....
    2. What many people thought was a really high dividend was in reality only about 35% real dividend, and 65% return of their own money (ROC) - they will later find that their "cost basis" is lower, by the same dollar amount as that "return of capital", thus resulting in lower loss (or higher gain) than they thought they had when they got rid of (sold) those shares..... (or if still holding, their cost basis is lower than what they actually paid per share, and will take a lot longer to recoup their losses)
    3. Don't misunderstand me, I'm as guilty as anyone of not knowing what's really happening, and learning "the hard way" - in fact everything above could be wrong, but that's my understanding.....
    4. Right or wrong, I'm still trying to figure out the investing advantages of ROC - anyone have an explanation?
    One thing would be (a) "no tax on that money payout," and (b) lower tax rate on capital gain than tax rate on dividends (assuming ROC results in capital gain when we do sell)..... Whatever, I'm still tryin' to determine the advantages.....
    5. Bottom line: it sounds to me like a lot of posters here don't really understand what they've done, and that they have been simply "chasing" a supposedly high dividend/yield.
    6. One disadvantage to investors is that no one knows (including the company) what percent of quarterly payout will be "real" dividend vs. "ROC" til end of year (In fact that's one reason for receiving "amended" 1099, and having to file tax return as late as possible)
    7. Sorry so much rambling, just couldn't help respond to posters here complaining abt shr price drop........

  • uhlerf uhlerf Apr 9, 2014 6:44 PM Flag

    according to my 1099, about 64% of the "distribution" for 2013 was "ROC" (return of capital,) which means paying you back some of your own invested dollars, AND lowering your "cost basis" by that amount, so when you go to sell shares your cost basis is lower than you originally paid, thus your "gain" is less than you 'might have thought'....
    My brokerage statement shows both "adjusted" and "original" price per share - (adjusted means lowered by the amount of "return of capital" [for the year])
    As I understand it, there's no tax due on any amount distributed as "ROC", but as stated above, your cost basis is lowered be that amount, so when you sell you have more gain than you might have thought, and you then pay "capital gain" tax on the full amount you "gained"..... (' course if you sell at a loss, then that loss is less than you originally might have thought)
    I guess the investment strategy that makes this concept advantageous is that you don't pay any tax on "ROC" but you will pay higher capital gain tax when you sell the stock, but capital gains tax is a lower tax rate than tax on regular dividends.....
    Sorry to be so wordy, but hope this helps. I'm still tryin' to figure out the advantage myself - it's really not a pain - just use the number your broker's statement gives you - there is one thing that IS a pain - the companies seem not to be able to tell til year-end whether or what amount of the distribution they handed out during the year will be ROC and how much will be regular dividends..... (I called one time and asked about this and was told they wouldn't know til year end - This is one of the situations where you don't want to file a tax return till last minute - in fact my broker (WellsFargo) has sent me an "amended" 1099 each year and also a note suggesting not filing tax return til last minute.....
    As said, sorry so wordy, but there's even more, but I've taken too much space already.....

    Sentiment: Buy

KO
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