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Started By
Message
ET's been doing work.
Posted on 1/25/23 at 4:23 pm
Posted on 1/25/23 at 4:23 pm
Was 8.01 on 12/1. They just announced a return to the (recent) full distribution of 1.22/Sh and up to 13.36 AH
3
Posted on 1/25/23 at 4:26 pm to Wraytex
Thanks for the heads up before the close!
Posted on 1/25/23 at 4:31 pm to TDFreak
But then I could have only told you it was up from 8.01 on 12/1 to 13.16 today with a distribution of 1.06
This post was edited on 1/25/23 at 4:32 pm
Posted on 1/25/23 at 4:44 pm to Wraytex
bought at $7.19
Posted on 1/25/23 at 4:54 pm to TigerintheNO
Was my first position when taking the plunge in '20, started at 5.68 and have 9k at 6.47 average. If I have my way, I'll croak with this one in the stable.
Posted on 1/25/23 at 5:24 pm to Wraytex
I've held ET from time to time, but the complications of the taxes from it being a limited partnership is just not worth the hold for me with my total money invested in it. I hope people realize how that works, it's not like a normal ordinary common share in a company, they pass the tax hit onto you, that's why the divi is so high.
It's not a huge deal but I figured I'd post just because I'm sure some fellas searched ET and saw the divi and were like aaaawahhhhat? Of course the people that wouldn't realize this also probably don't have enough income to trigger audits.
quote:
Energy Transfer will not pay any federal income tax. This allows for a higher potential cash flow payout to unitholders. Instead, each unitholder will be required to report on his or her income tax return his or her share of our income, gains, losses, and deductions without regard to whether corresponding cash distributions are received. As a result, a unitholder’s share of taxable income, and possibly the income tax payable by the unithholder with respect to that income, may exceed the cash actually distributed to the unitholder.
It's not a huge deal but I figured I'd post just because I'm sure some fellas searched ET and saw the divi and were like aaaawahhhhat? Of course the people that wouldn't realize this also probably don't have enough income to trigger audits.
This post was edited on 1/25/23 at 5:31 pm
Posted on 1/25/23 at 5:30 pm to Pendulum
That's fine, when I invested the wall street press was all about how the dividend was unsustainable and they recommend you avoid the stock. I can tell you I was all broken up watching my 20% rate dwindle to 9% before bouncing back up. 
"may exceed the cash actually distributed to the unitholder." Has this ever happened?
"may exceed the cash actually distributed to the unitholder." Has this ever happened?
Posted on 1/25/23 at 5:36 pm to Pendulum
quote:
I've held ET from time to time, but the complications of the taxes from it being a limited partnership is just not worth the hold for me with my total money invested in it.
Look into AMLP. ETF wrapper of MLPs. You get 1099s instead of K-1s. Great little option.
Posted on 1/25/23 at 5:36 pm to Wraytex
If you're fine with all the extra tax work; and worrying about when the K1 gets sent out; so you know what your actual cost basis is; than it's for you. I'm certainly not saying it's a bad buy or the divi is unsustainable.
I'm just pointing out what some newbies might miss:
LINK
I'm just pointing out what some newbies might miss:
LINK
quote:
Advantages
MLPs are known for offering slow yet steady investment returns. The slow returns stem from the fact that MLPs are often in slow-growing industries, like pipeline construction. This slow and steady growth means MLPs are low risk. They earn a stable income often based on long-term service contracts. MLPs offer steady cash flows and consistent cash distributions.
The cash distributions of MLPs usually grow slightly faster than inflation. For limited partners, 80% to 90% of the distributions are often tax-deferred. Overall, this lets MLPs offer attractive income yields—often substantially higher than the average dividend yield of equities. Also, with the flow-through entity status (and the absence of double taxation), more capital is available for future projects. The availability of capital keeps the MLP competitive in its industry.
Further, for the limited partner, cumulative cash distributions could exceed the portion taxed at the capital gains rate once units are sold.
Limited partners' liability for an MLP's debts and obligations is limited to the amount of their capital contribution.
Until the 2017 tax cuts act benefit expires in 2025, investors can deduct 20% of their distributions from their taxable income, reducing the tax they would otherwise pay.
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10
There are benefits to using MLPs for estate planning, as well. When unitholders gift or transfer the MLP units to beneficiaries, both unitholders and beneficiaries avoid paying taxes during the time of transfer. The cost basis will readjust based on the market price during the time of the transfer if the transfer happens because of death. There is no step-up in basis if the MLP's units are gifted. Should the unitholder die and the investment pass to heirs, the units pass tax free and fair market value is determined to be the value as of the date of death.
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12
Disadvantages
MLPs are extremely tax-efficient for investors. However, the filing requirements for this business structure are complex. An MLP’s income, deductions, credits, and other items are detailed each year on an Internal Revenue Service (IRS) Schedule K-1 form that is sent to the investor.
5
The K-1 can be complicated and create extra work for investors (or the tax professionals they hire).
MLP investors are required to pay state income taxes on their allocated portion of income in each state in which the MLP operates (which can be more than one). This can increase their costs.
Another tax-related disadvantage of MLPs is that you cannot use a net loss (more losses than profits) to offset other income.
9
However, net losses may carry forward to the following year.
13
When you eventually sell all of your units, a net loss can then be used as a deduction against other income.
14
MLPs have limited upside potential. However, this might be expected from an investment that should produce a gradual yet reliable income stream over several years.
Pros
Steady income
Relatively low risk
Tax-advantaged treatment
Liquidity
Limited liability for debts
Cons
Complex tax-filing
Limited capital appreciation
Limited to a few sectors
This post was edited on 1/25/23 at 5:41 pm
Posted on 1/25/23 at 6:59 pm to Pendulum
Sorry for the dumb question, but do any of you guys know how the tax stuff would affect someone with this stock in an HSA? I have a few shares, but might dump it if it’s a headache to deal with tax wise.
Posted on 1/25/23 at 7:26 pm to Pendulum
quote:
but the complications of the taxes from it being a limited partnership
Holding in retirement account
Posted on 1/25/23 at 8:15 pm to TheYAKKER
There's some CPA's on this board that would laugh out loud if I tried to explain it better, and I'm not a tax expert by any means, it's been a focus of mine to improve over last few years. Not sure about the HSA, I guess non taxable accounts would not be effected as far as dividends. But if you sold and had gains, your cost basis would be effected by it. Your cost basis is not what you bought it for in a MLP.
The only reason I learned what a MLP was is because I bought and sold some IEP a few years ago which is also a MLP.I couldn't figure out why turbo tax wasn't pulling my cost basis from Etrade report and I learned something new.
The only reason I learned what a MLP was is because I bought and sold some IEP a few years ago which is also a MLP.I couldn't figure out why turbo tax wasn't pulling my cost basis from Etrade report and I learned something new.
This post was edited on 1/25/23 at 8:18 pm
Posted on 1/25/23 at 8:56 pm to thelawnwranglers
quote:
Holding in retirement account
Basically the worst place to hold an MLP.
Posted on 1/25/23 at 9:02 pm to TheYAKKER
quote:
Sorry for the dumb question, but do any of you guys know how the tax stuff would affect someone with this stock in an HSA? I have a few shares, but might dump it if it’s a headache to deal with tax wise.
Unrelated Business Taxable Income is a problem in HSAs and Roth IRAs just like traditional IRAs.
Posted on 1/25/23 at 10:30 pm to slackster
quote:
Basically the worst place to hold an MLP.
Why?
Posted on 1/26/23 at 9:14 am to thelawnwranglers
Bc you already don’t get taxed on the dividends bc it’s “a return of capital”.
Posted on 1/26/23 at 9:32 am to thelawnwranglers
quote:
Why?
Because you have to pay taxes on unrelated business taxable income from the MLP even though the dividends are staying in the account. Once you have over $1,000 of UBTI your IRA will be responsible for a tax return. It’s not a personal tax return - the IRA has to pay it. It can be quite a mess. If you want MLPs in a tax qualified account, buy AMLP or something similar.
This post was edited on 1/26/23 at 9:32 am
Posted on 1/26/23 at 9:41 am to slackster
I sold lol
I can't deal with all that
I can't deal with all that
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