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Larry Sohl

Larry Sohl
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  • If You Own Dividend Stocks And Are Worried About Taxes, Then Read This... [View article]
    Agree 100%. Everyone agrees the system has to change. Nobody wants the change to affect them, however. I wasn't raised wealthy but have worked hard and been blessed. I'll chip in more. Me, you, and Warren Buffett.
    Mar 14 07:32 AM | 4 Likes Like |Link to Comment
  • If You Own Dividend Stocks And Are Worried About Taxes, Then Read This... [View article]
    Find me a politician with the guts to truly modify the tax code, and he's got my vote. The system has become so complicated, so convoluted, and full of so many tax breaks for special interest groups that no one can argue that's it's completely fair. It makes tax and retirement planning a crapshoot. How can you plan for retirement when you have no clue what the flavor of the day might be for taxes?

    I've got money going into a taxable brokerage account, 401k, Roth IRA, and a whole life plan. I don't have a clue what the tax environment may be 20 years from now, but at least I'll have some options to choose from when planning withdrawals.
    Mar 13 03:00 PM | 9 Likes Like |Link to Comment
  • If You Own Dividend Stocks And Are Worried About Taxes, Then Read This... [View article]
    I'll start by saying that proposed tax changes will hit me severely. But....

    Painting everyone in the lower tax brackets with one brush is unfair. They've ALL made a 'host of mistakes' and have no interest in elevating themselves? And are in your mind evidently not even worthy of having voting rights? No doubt, some people don't have the drive or ambition to succeed in everything they do. For every slacker, there are 100 hard working Americans trying to improve their lot in life. At least I like to think that's true.

    The tax proposals as of late are obviously targeted at the wealthy, but the tax rules for the prior 30 years have swung heavily in favor of the wealthy. Capital gains and dividend tax rates are nowhere near where they used to be. The game is increasingly rigged, as lobbyists and now Super-Pac's drive Washington's agenda. The uber-wealthy can pat themselves on the back and pretend that they have simply worked harder than everyone else, but 300,000,000 other Americans may not agree.
    Mar 13 01:48 PM | 8 Likes Like |Link to Comment
  • What Obama's Budget Proposal Means For Dividend Investing [View article]
    It should be pointed out that this is a moot point for dividend stocks being held in IRA's or 401K's. I can see a shift of more dividend paying assets from taxable accounts to tax-deferred accounts. Of course, I recognize that those already in retirement may be using the dividends as their main income source, and this change will have major repercussions on their asset allocation.
    Mar 8 09:07 AM | 1 Like Like |Link to Comment
  • 5 MLPs For Investors Seeking Yield [View article]
    There are many articles out there about MLP's. They have many positive attributes, but investors need to understand the possible negative issues. Tax paperwork becomes more complex (K-1 forms), although manageable with TurboTax and some patience.

    The tax advantages are likely less advantageous than many people think. Yes, taxes are deferred and returns will roll in. However, when it comes time to sell an MLP many people will be surprised by the tax hit. Years of returned capital will have greatly reduced your cost basis, and the bulk of your gain is typically taxed at ordinary income tax rates, not at capital gains rates. As I've learned here recently. :)
    Feb 28 10:28 AM | Likes Like |Link to Comment
  • Why You Should Avoid Chevron At These Prices [View article]
    Perhaps I'm more a glass half full type of guy, but your comment minimizing the potential 17% one year upside for pricing seems odd. If it comes to fruition, I'll take an annual 17% capital appreciation with a 3% dividend on top of it any time, and be very, very happy.
    Feb 21 08:59 AM | 6 Likes Like |Link to Comment
  • Are Master Limited Partnerships Viable Tax Shelters? [View article]
    Just when you think you fully understand the MLP's... you learn about another curve ball. Good article, thanks.

    This is not the first time I've seen references to the 'pyramid scheme' aspect of MLP's. There has always been a frenzy of growth and expansion in this sector. What's your take on this aspect, say 10 years down the road? Only so many pipelines can be built... only so much consolidation can occur. What happens when Kinder Morgan, Enterprise, or any of the large players lose the ability to manage the depreciation aspect through growth or acquistion, as you described?
    Jan 17 02:42 PM | 2 Likes Like |Link to Comment
  • Special Considerations When Buying Foreign Dividend Stocks [View article]
    I have owned Total in a taxable account and in an IRA, and I can confirm that the withholding is 15% in the taxable account and 25% in the IRA. Also, there is a foreign tax credit you claim on your 1040 (line 47) for the full amount of the foreign tax paid. Thus, the tax hit is inconsequential. I work through Fidelity, and all the tax implications (15% withheld, foreign tax credit) were handled by them with no input on my part (other than to download into TurboTax!). It makes no sense to hold this in an IRA (which I no longer do), as you'll pay the 25% tax and have no way that I know of to reclaim it as a foreign tax credit.

    As far as holding other issues, it's a personal choice. You can diversify by holding foreign stocks, and changes in currency exchange rates can help further increase their value at times.
    Dec 15 09:29 AM | 1 Like Like |Link to Comment
  • 4 Dividend Stocks Suitable For A Roth IRA [View article]
    http://bit.ly/vNKFDS
    Here's some more information.
    Nov 3 11:09 AM | Likes Like |Link to Comment
  • 4 Dividend Stocks Suitable For A Roth IRA [View article]
    MLP's don't belong in a retirement account. You can actually be taxed on profits from an MLP that are in an IRA or retirement account. The tax treatment and deferred gains from the MLP structure mean you are better off having them in a taxable brokerage account, anyway.

    There are options. You can use an ETN like AMJ or an ETF like AMLP. These diversified 'funds' deliver the returns of the MLP's but are suitable for retirement accounts.

    I know some people hold the ETF's or ETN's in lieu of the individual MLP's, even in their taxable accounts. Why? The paperwork is minimized. Come tax time, it's easier to deal with ETF's or ETN's than it is the MLP's. However, in my experience the paperwork complications of individual MLP's are grossly exaggerated.
    Nov 3 11:06 AM | 1 Like Like |Link to Comment
  • 4 Dividend Stocks Suitable For A Roth IRA [View article]
    Exactly. Thanks for the clarification. Although you can also roll over a deductible IRA to a Roth with no income limits now, although you will get hit with the taxes for that conversion.

    It gets tricky if you want to do this and already had a deductible IRA (which I did). You can't create a new non-deductible IRA in that case and simply roll it over to the Roth, thinking there will be no tax implications. For the purposes of these conversions, the IRS looks at ALL of your IRA's. If you put $5,000 in a new deductible IRA with the intent to roll over, but already have a $5,000 deductible IRA (for example), the roll over will have tax consequences. The IRS will add up the value of all your IRA's, regardless of source, and for tax purposes assume a percentage came from each. In the case above, if you roll over $5,000 to a Roth, the IRS calculates that $2,500 came from the deductible and $2,500 came for the non-deductible IRA. You'll be taxed on the $2,500 from the deductible IRA.

    Suffice it to say... if you already have a deductible IRA and want to do what I did, clearly understand the possible tax consequences. If you have no deductible IRA, you can easily create a new non-deductible IRA and roll it over to the Roth with no tax implications.

    Make sense? I'm an engineer, not a CFP, but I think I got it right!
    Oct 28 10:30 AM | 2 Likes Like |Link to Comment
  • 4 Dividend Stocks Suitable For A Roth IRA [View article]
    Your comment about Roth IRA's being unavailable to high earners is incorrect. There is a workaround for those who are above income limits. In the last few years, it's now become possible for anyone to open a regular IRA account, and then immediately roll it over into a Roth IRA. The new rollover provision is the key. I've done this the last few years despite exceeding regular income limits, and it's a perfectly legal and well documented loophole.
    Oct 28 09:01 AM | Likes Like |Link to Comment
  • MLPs: Investments That Are Required to Pay Dividends [View article]
    If you reinvest the quarterly 'dividends' automatically as I do, your cost basis will never go to zero. You essentially add to your number of shares, while the overall cost basis remains unchanged.
    Jun 20 08:04 AM | 1 Like Like |Link to Comment
  • Tortoise Energy Infrastructure: A Good Way to Invest in MLPs Inside an IRA [View article]
    I'd say you need a new CPA. Either he's a con artist, or you are creating a story to steer people towards the closed end funds. I've owned multiple MLP's in a brokerage account, and the tax issues are not that... 'taxing'.
    Jun 1 08:11 AM | 2 Likes Like |Link to Comment
  • Kayne Anderson's Kevin McCarthy: Closed-End MLPs Offer Simplified Tax Filing [View article]
    Yes, I understand the different structure. So in AMJ's case, you are taking a risk that JP Morgan may go bellyup.

    I see no advantage of Kayne funds, unless you are worried about the exposure to JP Morgan. You can achieve essentially the same results, with far smaller management fees. For non-retirement accounts, I simply hold the base MLP's. The tax consequences are not that difficult to deal with, just using TurboTax.
    May 27 10:17 AM | Likes Like |Link to Comment
COMMENTS STATS
125 Comments
270 Likes