Kinder Morgan Insider Sold Shares Worth $526,536, According to a Recent SEC Filing5:36 PM ET, 12/07/2023 - MT Newswires
05:36 PM EST, 12/07/2023 (MT Newswires) -- Denise R Mathews, Vice President and Chief Administrative Officer, on December 06, 2023, sold 30,000 shares in Kinder Morgan (KMI) for $526,536. Following the Form 4 filing with the SEC, Mathews has control over a total of 80,978 shares of the company, with 79,217 shares held directly and 1,761 controlled indirectly.
SEC Filing:
sec.gov
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I did sell 15% of my High Cost shares I bought earlier this year for a small gain. I needed to book a short term gain to offset some other short term losses. I see the net s/t term gain was 6%
I guess we will be getting form 8937 for 2023 some time in 2024. This form shows the qualified dividend and ROC (Return of Capital). It looks like in most part the dividend is 'Qualified' but in 2020 I see half of the dividends were ROC.
As a result I probably overstated my dividend income as I did not adjust my IRS return to reflect the ROC payments. I believe Schwab will automatically reduce your cost basis by the ROC amounts but have not verified that.
This may/could be true for many of the pipelines and perhaps other dividend payers.
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Ai Bard's explanation of ROC and types of companies that use this catagorization:
Reasons for ROC in DividendsCompanies may have a portion of their dividends categorized as Return of Capital (ROC) for several reasons:
1. Depletion of Assets:
- This applies to companies that deplete natural resources like mining companies or timber companies. They may distribute a portion of their earnings as ROC, representing the depletion of the resource base and ensuring the return of invested capital to shareholders.
2. Real Estate Investment Trusts (REITs):
- REITs are required to distribute most of their taxable income to shareholders. However, since they are not allowed to depreciate their properties, some of the distributed income may be considered ROC, representing the return of initial investment in the properties.
3. Excess Capital:
- Companies with more capital than they need for reinvestment may distribute excess cash as ROC. This allows them to return capital to shareholders while avoiding the double taxation of dividends.
4. Accumulated Deferred Taxes:
- Companies may have accumulated deferred taxes from previous accounting periods. When these taxes are paid, the corresponding amount of the dividend may be treated as ROC.
5. Tax Strategy:
- Companies may use ROC as a tax strategy to reduce their shareholders' tax burden. By distributing some of their earnings as ROC, they can lower the overall taxable income for their shareholders.
Types of Companies with ROCGenerally, the following types of companies are more likely to have ROC in their dividends:
1. Resource Companies:
- Mining companies, oil & gas companies, and timber companies often have ROC due to the depletion of their natural resources.
2. Real Estate Investment Trusts (REITs):
- As mentioned above, REITs are required to distribute most of their taxable income as dividends, and part of this may be considered ROC.
3. Master Limited Partnerships (MLPs):
- Similar to REITs, MLPs are required to distribute most of their income to unitholders. A portion of this distribution may be classified as ROC.
4. Companies with Declining Assets:
- Companies with declining asset values, such as companies in mature industries or companies undergoing significant restructuring, may distribute ROC to reflect the reduction in their underlying asset base.
5. Companies with Excess Capital:
- Companies with significant cash reserves that they are not investing back into the business may choose to distribute some of this as ROC.
It is important to note that the presence of ROC in a company's dividends does not necessarily indicate financial weakness. In fact, it can be a sign of a healthy company that is efficiently managing its capital and returning excess cash to shareholders. However, it is crucial for investors to understand how ROC is treated for tax purposes and how it affects their investment thesis. |
