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  • Retire With Power... Purchasing Power [View article]
    JJC substantially all MLP income/loss is ordinary. When an investor sells an MLP there is substantial depreciation recapture that is ordinary income. In a taxable account any gain after the recapture would be capital gains. Obviously holding an appreciating asset in an IRA converts potential capital gain into potential ordinary income. However, the use of money and selling within the IRA can more than offset the tax differential. With regard to foreign taxes withheld since MLPs are passive investments and subject to the passive limitations the foreign tax credits are suspended and may, in some instances, become a deduction. I have several MLPs and the foreign tax withheld is nominal. The biggest issue with MLPs in IRAs is the very real potential for UBTI from the dividend recapture upon sale of the MLP and/or its being distributed out of the IRA.
    Apr 1 05:28 PM | Likes Like |Link to Comment
  • Retire With Power... Purchasing Power [View article]
    Aids Patient- Your CPA is correct in suggesting that you do not want MLPs in your IRA. In the lower left hand corner of the Form K-1 that you receive from each MLP is your taxable basis. Since these are partnerships each partner shares in the gains and losses. In simple terms your cost basis increases (decreases) by the taxable income (loss) allocated to the partner and decreases by distributions received. When you sell an MLP your total gain is the difference between your sales price and your tax basis. Additionally, some portion of your gain will be ordinary income and some will be capital gain.
    Mar 20 09:46 AM | Likes Like |Link to Comment
  • Retire With Power... Purchasing Power [View article]
    Brucejfern-I have read your comments on UBTI in IRA accounts. While it may be true that in any given year you have not paid UBTI. The issue will be very real to you when you either transfer the assets out of the IRA or you sell an MLP within the iRA. If you have held MLPs for an intermediate to long term your cost basis is at or near zero. When you sell it there is significant dividend recapture which is ordinary income and therefore UBTI and subject to taxes. If you go to and log in to your account at the bottom is a tax calculator that estimates your gain and allocates it between ordinary and capital. The ordinary income is subject to UBTI.
    Mar 19 08:56 AM | Likes Like |Link to Comment
  • Bank Of America: 5% Yield And Approximately 25% Upside Potential [View article]
    I have held this preferred since April 2010 and it has paid like clockwork. I hope it is never called. What could be better 4% minimum and upside as short term rates increase. A company cannot pay ANY dividend on its common stock unless the preferred is paid first. Even through the "financial crisis of 2009" the common was paid a dividend and the preferreds were paid their stated dividends. Almost all bank and financial institution preferreds are non-cumulative. Happily long with BAC-E
    Mar 14 10:55 AM | 6 Likes Like |Link to Comment
  • Phillips 66 And Valero MLP Spin-Offs Jump To A Fast Start: What's Next? [View article]
    MLP Data I must disagree with your change in unit price. While I generally agree that MLP unit priced increase with increases in the distribution yield, it doesn't make sense to me that pipeline MLP investors will settle for a 2% yield long term. I recently initiated a small position in PSXP yielding 2.34%. I bought it because I think that the distributions will increase quickly. However, I doubt that the unit price will move in lock step. Long term why would an investor buy PSXP to yield 2% (once distribution growth slows) when they could buy EPD with a 4% yield and KMP with a 6% yield?
    Mar 7 09:40 AM | Likes Like |Link to Comment
  • Mortgage REITs: Proceed Without Fear [View article]
    PM 101 I do not understand why you have included CWH in this article. Looking at its property list on its website it is clearly an eREIT and not an mREIT.
    Mar 2 11:03 AM | Likes Like |Link to Comment
  • Verizon - A Good Candidate For Long-Term Investment [View article]
    NJ Alan if you are going to add in the recently issued shares from the VWZ acquisition you should also add back the 45% of the VZW income that was allocated to VOD and subtract out the interest on the newly issued debt. I suggest that the PR will come more back into line with the historical PE. You have simply added the shares and not accounted for the additional income and interest expense. Also, there will be some immediate selling since certain VOD shareholders (in Great Britain) cannot hold US shares. This has been disclosed in the prospectuses. However, the selling will be quick.
    Feb 23 11:52 AM | 6 Likes Like |Link to Comment
  • Does Royal Dutch Shell Remain A Good Income Investment? [View article]
    RDS-A tends to trade at about a 5% discount to RDS-B. I suggest that there are two reasons: 1) the A shares are subject to 15% tax withholding and many people don't want to deal with this issue and 2) most finance sites reflect the dividend net of the 15% withholding so the yield is incorrectly lower than reality. Long both A and B but all future purchases will be A shares in a taxable account.
    Feb 6 02:33 PM | 2 Likes Like |Link to Comment
  • Why I Bought Unilever This Morning [View article]
    UN trades at a lower price because of the Dutch tax witholdkng. As a result most site incorrectly reflect a lower dividend. If an investor is buying either UL or UN in a taxable account UN is the better investment. The foreign tax withheld is creditable against your US income taxes. Long both UL and UN.
    Feb 4 06:40 PM | Likes Like |Link to Comment
  • My K.I.S.S. Dividend Portfolio 3rd Quarter Update [View article]
    PTI you should worry about UBTI with MLPs in tax deferred accounts. The issue is not necessarily each year. The issue is when you either sell the position or transfer it to a taxable account. There generally is quite a bit of recapture that is ordinary income and therefore subject to UBTI. If you log into the tax site for the MLPs you can find an estimate of the ordinary income to be recognized at sale by MLP. Long several MLPs and only in a taxable account.
    Feb 2 08:57 AM | Likes Like |Link to Comment
  • ModernGraham Annual Valuation Of AbbVie [View article]
    Ben it is not that it doesn't qualify for either investment purpose that makes the article a waste of time. It is the fact that, due to its short history, it cannot qualify for an investment based on your criteria and that is what makes this article a waste of time. SA should not have published this.
    Jan 31 07:05 PM | Likes Like |Link to Comment
  • ModernGraham Annual Valuation Of AbbVie [View article]
    MG based upon your criteria there is no way that ABBV could qualify for purchase. Since a company must be public for 5 or 10 years to meet have even possibly meet your criteria. Therefore, this is a waste of time and should not have been published by SA.
    Jan 31 04:18 PM | 2 Likes Like |Link to Comment
  • STAG May Soon Be The Next 'Monthly Dividend Machine' [View article]
    Brad thanks for this and other REIT articles. I have been buying STAG with an average cost of $21.22. Also, currently holding 11% of our equities in REITs and considering more. Almost all of the REIT purchases have been as a result of your articles. Long RYN, HCP, NHI, DLR, STAG and HTA.

    Thanks for your insights
    Jan 23 11:04 AM | 1 Like Like |Link to Comment
  • How Not To Invest In Dividend Stocks [View article]
    Aids Patient depending upon your tax bracket and the withholding rate you may or may not recover all of the foreign tax withheld from any individual holding. However, check with your CPA, because the way the form works the tax payer reflects ALL of the foreign source income and ALL of the foreign taxes withheld. Therefore, using just RDS as an example, if you have a mix of both the A and B shares in a taxable account you will recover all of the foreign taxes withheld. Even though there is no withholding on the B shares the dividends received are still foreign source income. BTW you can also do the same thing with RDS-A and WBK it doesn't need to be the same company. Disclosure I am a CPA and long both RDS-A and RDS-b for the reason stated above.
    Jan 22 08:32 AM | Likes Like |Link to Comment
  • General Electric: Unwarranted Sell-Off Represents An Opportunity [View article]
    rubel I respectfully disagree with you stock ownership is only about profits. If you do not trust management move on to a company that meets your criteria. What the stock price was 4, 10 or 20 years ago is meaningless to me. I look to the future not the past. I have been investing for over 40 years and have been successful I will not stick to either the coffee can nor the cds. Perhaps you need to review your criteria and use the windshield and not the rear view mirror. I am happy with the stock price and dividends based upon when and where I purchased the company and the issues it faced as well as where I think it is going from here.
    Jan 21 05:22 PM | 2 Likes Like |Link to Comment