d_teller

Why Dividend Investors View Stocks Differently

To User 16832, above...none of the income from the K-1 has to be reported...of course in a tax shelter you gain no benefits from the return of capital, investment losses and tax-loss carry forwards, but the thing to watch out for is:

Unrelated Business Taxable Income Item 20 Code V.

If this exceeds 1K , across all the taxpayer's shelters, the Fiduciary has to file a 920t Federal income tax form and the Fiduciary has to take that tax from the sheltered account...The beneficial owner, the taxpayer can't pay it for reasons:

It's after the fiscal year...and would be considered a late and excessive contribution;
It's not permitted to pay tax from a sheltered account directly...etc.

The costs of having the fiduciary file the 920t (the bank or brokerage who reports the ?4978? form to the IRS) can be high. This fiduciary doesn't issue the K-1, it comes from the settlement, index-maker or accountants from the MLP, or commodity futures trading ETF, etc.

If not paid, the IRS accumulates the amounts across all the taxpayer's accounts by taxpayer number and can disqualify the tax shelters and render them taxable.

NEVER HOLD ANY SECURITY THAT ISSUES A K-1 in any tax-sheltered account.

Unrelated Business Taxable Income is income received by the Partnership from e.g., a sale of assets (a pipeline MLP selling off a line to an oil company) that is Unrelated to the Business of the MLP's Tax Shelter Registration (e.g., for a MLP of a pipeline Co., that would be the income derived from royalty payments based upon the charges it makes to move the oil...not the income from the sale of an asset.)

Each MLP that trades here or in Canada, has a Tax-Shelter Registration number that relates to the filings of the kind of businesss it expects to do, the kinds of icome and expenses it expects, and the agreement to pass the bulk of these proportionally to the Publicly Traded Partnership-limited partners, to avoid paying income tax at the MLP level.
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To "notsosmart" and others reveling in FRO's dividends...I hope the shares aren't in a shelter, because back in FRO's prospectus, in boldface and italics;

"...may hypothecate the shares held ...by shareholders... " or words to that effect.

Hypothecate means use as collateral for loans, which means that in the shelter, your shares are being used to secure a company's loans.

I'd check with FRO's legal team, because that would invalidate your shelter...you can't hypothecate or lend your interests in the shelter to any one else under any circumstances.

Since Frontline is headquartered outside the U.S., they may not care, but I sold mine as soon as I saw that in the 2006-07 Ann Report and prospectus, and similarly for the SFL (Ship Finance International) spinoff. I'd hold them in a taxable account.

Pharmaceutical Facts Investors Should Know

To BioInvestor...the pet food and heparin that caused so many deaths were "branded"... and so was the "fake" Colgate that contained a diethylene glycol as a sweetener. Neither the FDA or the USDA is up to the moral challenge of their charters, so it behooves the intermediate importer to spec. and test, beyond what AAOAC requires, because "smart & greedy" chemists overseas can pull a fast one, when the test is indirect. I would require GC-MassSpec for any intermediate, to prevent doping.

With regard to the Rx companies' spending on R&D vs Marketing & Lobbying, there are many natural treatments that don't have a systematic standards base...and a lot were sequestered by Big Pharma, because they couldn't isolate and rebrand the "active" intermediate. In other cases, they bought the company - or researcher - and shut them up...which might be "good business", but like hiring the guy who torpedoed the Medicare Rx plan and then retired from the Senate, and is now head of the PMA lobbying group...it's not very ethical.