David D.
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Latest Comments9 Comments
Did Buffett Kill the (First) Wells Fargo-Wachovia Deal?
Wells Fargo Is Quietly Expanding Its Business
Wells Fargo Is Quietly Expanding Its Business
Why Buy MLPs?
The author also usefully mentions KMR as a nice alternative to dealing with the K-1s and as an option for those investors who would like energy infrastructure MLPs in their IRA accounts. In that regard, I would also like to highlight a second option, corporations, acting somewhat akin to closed-end mutual funds, that specialize in holding pipeline MLPs. These include symbols TYG and KYN. They both have good yields, are diversified among MLPs moving crude, refined products, and natural gas. Above all, they are themselves structured as corporations, not limited partnerships, so you get a normal 1099-DIV, not a K-1. That means less complicated tax filing AND qualified dividends. Yet, it gets better. Because of the underlying tax deferral qualities of the MLP structure, and since these two corporations own exclusively MLPs, your 1099-DIV will still characterize a substantial amount of your quarterly dividends as return of capital, which lowers your tax obligation. Of TYG and KYN, my personal favorite is the former. The URL is www.tortoiseadvisors.c.... Thanks for the MLP write-up.
Allied Irish Banks: With 9% Dividend, This Bank Could Thrive
Ireland does withhold 20% as per the EU norm, UK excepted, I believe. Canada does the same. However, it is very easily reclaimed on your tax filing irrespective of your tax bracket or filing status. That is to say, you still get 100% of the dividend, you just get some of it as a credit on your taxes. It takes the form of an entry in box 6 of form 1099-DIV from the brokerage firm indicating the foreign tax paid. This full amount is then entered for a credit on the second side of the standard 1040. On the 2007 verion of the 1040, it was line 51, titled, "Foreign Tax Credit." It is terribly easy to accomplish and, when dealing with publicly traded stocks, as opposed to control stakes in a private, foreign-domiciled businesses, there are no extra supplemental forms.
While easily done, I fully concede that a more rigorous analysis of AIB's pluses and minuses would entail a time value of money calculation taking into account some months of lost interest on that withheld 20%.
The Irish government's tax policy, a matter of remarkable clarity, is outlined in the link below.
Cordially,
DD
www.idaireland.com/upl...
Allied Irish Banks: With 9% Dividend, This Bank Could Thrive
Ireland does withhold 20% as per the EU norm, UK excepted, I believe. Canada does the same. However, it is very easily reclaimed on your tax filing irrespective of your tax bracket or filing status. That is to say, you still get 100% of the dividend, you just get some of it as a credit on your taxes. It takes the form of an entry in box 6 of form 1099-DIV from the brokerage firm indicating the foreign tax paid. This full amount is then entered for a credit on the second side of the standard 1040. On the 2007 verion of the 1040, it was line 51, titled, "Foreign Tax Credit." It is terribly easy to accomplish and, when dealing with publicly traded stocks, as opposed to control stakes in a private, foreign-domiciled businesses, there are no extra supplemental forms.
While easily done, I fully concede that a more rigorous analysis of AIB's pluses and minuses would entail a time value of money calculation taking into account some months of lost interest on that withheld 20%.
The Irish government's tax policy, a matter of remarkable clarity, is outlined in the link below.
Cordially,
DD
www.idaireland.com/upl...
While Street Yells 'Sell!' Lampert Buys Back 4% of Sears
Opportunity Now in Franklin Templeton
A. The asset management business is attractive but if you look deep in Franklin's financials you will find that they have also been in the business of securitizing car loans. However much of a sideline, I imagine that this gives the market pause at times like this.
B. I would maintain that TROW has a higher valuation NOT, as everyone assumes, because their AUM is heavy equity but rather because they have a strong presence in the defined contribution pension (401 K) market which provides more assured cash flows at times like these. Franklin is comparatively weak in that area. Where are the Franklin-Templeton target date funds? Meanwhile the place where Franklin is quite strong happens to be overseas and particularly Europe --speaking in terms of not only invested AUM but more the sourcing of the AUM (i.e. the country where the client is domiciled). Everyone sees "overseas" as sexy but Europeans are notoriously fickle about their mutual fund or "investment trust" holdings. They dump their shares at the slightest sign of a downturn and are far, far less inclined than Americans to buy and hold. This is why so-called structured investment products are so popular in Europe. In any event, the point is that TROW's domestic DC plan strength looks good at the moment while BEN's asset gathering in foreign lands looks like a source of weakness at the moment.
Thanks for your thoughtful piece.
Status Report: Wrigley / Mars