rsingh6675
Recycles dryer sheets
- Joined
- Nov 16, 2008
- Messages
- 126
Are there any good 8% dividend stocks or Mutual Funds in your retirement portfolio?
No, if there were I would sell them.
8% is into the realm of chasing the yield. Yes, it may pay off well, but odds are better that the company is in trouble and the dividend is in jepordy.
The only exception would be REITS or other businesses that are required by law to pay out a percentage of their profit as dividends.
However, I wouldn't call any energy or reits 'solid'. You can find them, depending upon the amount of risk you want to take.
Yes, and this thread has been moved there (Stock Picking Forum).I think there is a separate board for discussing individual stocks.
Are there any good 8% dividend stocks or Mutual Funds in your retirement portfolio?
Can someone explain what the "master limited partnership" issue is with personal taxes? I bought some ETP for income but am confused on what Morningstar is implying about the tax issues.Morningstar's Dividend investor newsletter has several stocks and MLPs near 8% yield that have reasonably safe dividends. MO, NS, ETP, MMP, and KMP. The editor particularly like ETP since it has 5 star M* rating. Another editor of income newsletter also likes ETP.
Can someone explain what the "master limited partnership" issue is with personal taxes? I bought some ETP for income but am confused on what Morningstar is implying about the tax issues.
Any chance you could sum that up for a situation where it's just an investment for non-IRA/401K investments where I am taking the monthly income? I assume the dividends are taxable like most normal stocks?ETP is a master limited partnership - MLP (aka PTP-Publicly Traded Partnerships).
MLPs/PTPs do not pay corporate tax. Distributions (technically not dividends) to investors, are deemed, for tax purposes, to be tax-deferred “return of capital.” Investors are given their share of the PTP’s income and also a share of the PTP’s deductions (such as depreciation) losses, and credits. These will offset most or all of the ordinary income. If there is a net loss (remember, this is a tax accounting fiction---your PTPs pay CASH distributions) it is considered a “passive loss” and isn’t deductible from income, though it may be used in future years to offset any ordinary income from the PTP or to offset other income when you sell your units. Passive income and loss from a PTP may only be used to offset income and loss from the same PTP. Your adjusted basis in the stock is reduced by the amount of any passive loss or tax deferral.
So for a taxable account you can effectively DEFER taxes on a large portion of your PTP income -IMO, that's a good thing.
For Roth's or Traditional IRAs - it's a little more complicated - Income from an MLP/PTP may be considered unrelated business taxable income (UBTI) subject to tax. However it will not be taxed as long as the amount of this income and all other sources of UBTI does not exceed $1,000 in any one year.
So you can hold PTP/MLPs in retirement accounts as long as the UBTI PORTION of the distribution is under $1000/year - no problems.
If it's over $1000/year the retirement account might have to pay a tax on it.
I keep my MLPs in a taxable account because I fail to see the benefits of shielding one of the few legal tax deferring vehicles in a tax deferred (or tax exempt) account.
I know its long but hope it helps
Generally, your assumption is wrong (I'll resist the urge to trot out the line about you know what happens when you assume ):Any chance you could sum that up for a situation where it's just an investment for non-IRA/401K investments where I am taking the monthly income? I assume the dividends are taxable like most normal stocks?
Ha Ha when I clicked the link I got a security warning. Does Investors village charge a fee for the forum?
Second question for the MLP you've had for 25 years, isn't your basis near zero? How do you handle that?
Ha Ha when I clicked the link I got a security warning. Does Investors village charge a fee for the forum?