No. of Recommendations: 3
Do you know where each of these are properly reported on your tax return?
If you rely on software like Turbo Tax, do you know how to tell if you entered the data correctly?
Do you know how to check to make sure the K-1 import into your software was done correctly?

As to my fees, many of my clients (this particular one included) tell me I don't charge enough. But I'm more than happy with the hourly rate I get for the work, so both my client and I are happy with the arrangement.

--Peter


I tried Turbo Tax this year, and must admit the K-1 experience included a healthy dose of me saying "well, I hope that worked"...

I think I'd prefer some obtuse instruction manual to put together a piece of Ikea furniture that has 117 parts over Turbo Tax and dealing with K-1's. Either way, it involves lots of cursing on my part.

BB
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No. of Recommendations: 2
Stocks pay dividends on an annual basis. If they give you dividends every 3 months, you get 1/4 of the annual amount.

THere's a benefit of quarterly dividends. They could decide to increase the dividend payout midway during the year.

Of course, if you are getting an 11% annual dividend, it likely isn't going to be for long. That is a sign that the stock price has plummeted. At best, a good company will be paying 3-4-5% and that is for a utility type stock with limited growth potential.

The SP500 pays a bit over 2% now.

If you get 11%, it is either something like a Limited Partnership returning part of your investment with pain in the butt K-1 forms each year...or a company falling on hard times and likely to chop the dividend or eliminate it totally!

There are some UK companies that pay six month dividends.......twice a year - but you only get 'half' of the annual amount each six months.



t.
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" A stock pays 11% dividend. I buy 3000 shares."


Is your broker Bernie Madoff?


if so....run the other way!


t.
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No. of Recommendations: 1
No broker, just reading from the Motley Fool site: https://www.fool.com/investing/2017/10/11/3-hated-dividend-s...

Energy Transfer Partners:

Current Price: $18.39
Prev Close: $18.63
Open: $18.67
Bid: $18.38
Ask: $18.50
Day's Range: $18.26 - $18.72
52wk Range: $17.85 - $27.99
Volume: 4,899,314
Avg Vol 7,062,147
Market Cap: $13B
P/E (ttm): 20.25
EPS (ttm): $0.92
Div & Yield: $4.22 (11.8%)
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No. of Recommendations: 1
EPS (ttm): $0.92
Div & Yield: $4.22 (11.8%)


Unless there is some significant one time event (that REALLY is a 'one-time' event), you cannot expect that dividend to continue, since the company is paying out more than 4 times what it earned.

That said, if the dividend continues to be paid at that rate, and it pays quarterly, you would get 1/4 of the $4.22 per quarter for each share, or $1.055 per share. So, if you buy $3000 shares, you would get $3165 every quarter.

If they pay semi-annually, you would get twice that, every 6 months. If they pay monthly, you would get 1/3 of that every month.

AJ
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Thank you AJ, just curious how it worked.
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Also keep in mind that Energy Transfer Partners is not a corporation and does not technically pay dividends. It is a partnership, and pays distributions of capital.

Those distributions are not taxable. They are a return of your investment in the partnership. Instead, you will pay tax based on your share of the business's income.

Taxation for this investment is significantly more complicated that an investment in a stock. You will get a Form K-1 from the partnership giving you figures that are spread all over your tax return.

--Peter
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Taxation for this investment is significantly more complicated that an investment in a stock. You will get a Form K-1 from the partnership giving you figures that are spread all over your tax return.

That's what knowledgeable accountants are for. I have been mostly invested in partnerships (MLP's) for the 14 years I've been retired and they have been the backbone of my successful investing all those years. The negative comments by some, have kept many from investing in MLP's which keep prices low and income high.

b&w
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"I have been mostly invested in partnerships (MLP's) for the 14 years I've been retired and they have been the backbone of my successful investing all those years. The negative comments by some, have kept many from investing in MLP's which keep prices low and income high."

Some of the MLPs - especially in the oil/gas area, got clobbered with the drop in oil prices.

Well, most the 'dividend' if you will is your money being returned to you. Hardly a win-win strategy. For some, it's a good tax dodge.....you get to write off some as depreciation......

I suspect for most people, it's not a great investment, and of course, with 'low prices' - the market is smart. If it really were paying more with less risk than triple AAA companies, the market would be all over it.


t.
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That's what knowledgeable accountants are for. I have been mostly invested in partnerships (MLP's) for the 14 years I've been retired and they have been the backbone of my successful investing all those years. The negative comments by some, have kept many from investing in MLP's which keep prices low and income high.

I'm not dissing it as an investment at all. Just trying to help people understand what they are considering as an investment.

Much better to understand limited partnerships before investing in one, than trying to figure it out when this mysterious tax form shows up in the mail.

I happen to be one of those knowledgeable accountants, and I immediately recognized ETP. I've got one nice client who likes investing in oil and gas LPs. He pays me a lot of money to handle his partnerships.

--Peter
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I happen to be one of those knowledgeable accountants, and I immediately recognized ETP. I've got one nice client who likes investing in oil and gas LPs. He pays me a lot of money to handle his partnerships.

I hope you aren't overcharging him. Because you and I both know ---The K-1 is really not a big deal.

The big deal for me is----

In 14 years of retirement my portfolio values are up 13 times over the original value and that is after removing 4 times the original value for all living expenses including taxes.


I have no pension , annuity or other income, other than minimal SS. Currently my MLP's value are about 39.5% of my entire portfolio

b&w
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No. of Recommendations: 18
I hope you aren't overcharging him. Because you and I both know ---The K-1 is really not a big deal.

OK. Quiz time.

Are you familiar with the things that often are included on oil & gas K-1s? Let's try a few.

Ordinary income (I'll give that one away)
capital gains (probably another gimme)
interest and dividend (still easy, but let's get harder)
Domestic Production Deduction
Foreign tax credit
Section 1231 gains and losses
Unrecaptured section 1250 gain
non-deductible expenses
calculating basis
calculating gain or loss on your sale of the interest in the LP (I'll give you a hint, the 1099B from your broker for the sale of LPs is as likely to be wrong as it is right.)
multi-state taxation
Unrelated Business Taxable Income

Do you know where each of these are properly reported on your tax return?
If you rely on software like Turbo Tax, do you know how to tell if you entered the data correctly?
Do you know how to check to make sure the K-1 import into your software was done correctly?

As to my fees, many of my clients (this particular one included) tell me I don't charge enough. But I'm more than happy with the hourly rate I get for the work, so both my client and I are happy with the arrangement.

--Peter
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No. of Recommendations: 0
B&W:"In 14 years of retirement my portfolio values are up 13 times over the original value and that is after removing 4 times the original value for all living expenses including taxes."

Wow...let us say you had $250,000 to start....... now you have over 3 million..and you took out a million along the way to live on........

incredible.

Keep going and in another 14 years, you'll have 35 million in your nest egg....


t
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No. of Recommendations: 3
Do you know where each of these are properly reported on your tax return?
If you rely on software like Turbo Tax, do you know how to tell if you entered the data correctly?
Do you know how to check to make sure the K-1 import into your software was done correctly?

As to my fees, many of my clients (this particular one included) tell me I don't charge enough. But I'm more than happy with the hourly rate I get for the work, so both my client and I are happy with the arrangement.

--Peter


I tried Turbo Tax this year, and must admit the K-1 experience included a healthy dose of me saying "well, I hope that worked"...

I think I'd prefer some obtuse instruction manual to put together a piece of Ikea furniture that has 117 parts over Turbo Tax and dealing with K-1's. Either way, it involves lots of cursing on my part.

BB
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No. of Recommendations: 3
K-1's rank somewhere between irritant and nightmare for me, starting with the fact that they always arrive later than all my other documents and put my CPA in a bind. The 'good' news is that I am getting rid of another one this year as part of my 'tax strategy'. That is a lame joke. It lost so much money that I am selling it to offset gains that I am harvesting on the small local bank stock that I mentioned yesterday - so one less k-1 year after next for me.
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No. of Recommendations: 2
K-1's rank somewhere between irritant and nightmare for me, starting with the fact that they always arrive later than all my other documents and put my CPA in a bind. The 'good' news is that I am getting rid of another one this year as part of my 'tax strategy'. That is a lame joke. It lost so much money that I am selling it to offset gains that I am harvesting on the small local bank stock that I mentioned yesterday - so one less k-1 year after next for me.

I'm sorry for your loss(es). However, blaming your losses on the MLP and/or K-1 is not realistic. I would blame it more on the poor selection of an MLP to buy or poor timing when buying it. It's exactly the same as buying a stock at a high price and then selling it at a loss and then blaming the loss on the 1099 you receive.

b&w
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No. of Recommendations: 8
b&w: "I'm sorry for your loss(es). However, blaming your losses on the MLP and/or K-1 is not realistic."

I certainly did not intend to blame my losses on the MLP and/or K-1. I can't even figure out from my post why you think I was blaming my losses on the MLP and/or k-1. I guess I need to improve my communication skills.
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I guess I need to improve my communication skills.

Communication is a two way street.

Just sayin'

--Peter
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Hi Ptheland,
I was wondering if you could tell us about state taxes on MLP's. I do not know if this is correct but I was told that some of the MLP's go through some states where you "should" pay a state tax on them. Also, lets say that you are blissfully investing in MLP's and doing your taxes incorrectly. Could that come back to haunt your spouse on your "untimely" demise?

Andy
I blame my parents for giving me a conscientious, why would anyone think about their wife when they are dead?
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No. of Recommendations: 6
I was wondering if you could tell us about state taxes on MLP's.

Some. The most important thing to know is that every state is different.

I do not know if this is correct but I was told that some of the MLP's go through some states where you "should" pay a state tax on them.

Yep. That's correct. And it even more correct if you remove the quotes from the word should. As the late TMFPmarti commented, I get worried when people have to put quote marks around ordinary words.

Also, lets say that you are blissfully investing in MLP's and doing your taxes incorrectly. Could that come back to haunt your spouse on your "untimely" demise?

There is no need to wait for your untimely demise for the errors to come back to haunt you. It's all up to the enforcement arms of the various state tax departments to determine who they will go after and what dollar thresholds they consider worthy of enforcement.

--Peter
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Thanks Peter that is helpful.

Andy
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