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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (78447)	11/3/2025 4:51:32 PM
From: E_K_S	Respond to of 78774

Re Cost Basis The broker gets information from the MLP (and it's delayed a bit) but eventually it is shown in my Cost Basis by the brokerage firm. Then based on my earlier post, If I do nothing and the basis goes to zero, the brokerage will send me a 1099-B showing my dividend (ROC) that is taxed as a long term capital gain. I can add more shares if/when the price is attractive and my cost basis will increase at which time any future distributions will reduce the new cost basis (ROC) . . It's a good position to be in. I have 60 shares left and looks like those shares were bought August 2020. My quarterly div was $233 so annual div could be $932 if I do nothing. That implies I may have a net ROC of $359 in 2026 which I must pay long term capital gains on. So for me, the broker is doing the accounting on the cost basis. I do monitor the annual K1. I had large sales in 2024 and some small sales in 2025. (In hindsight s/d have never sold) If I sell shares at $98.64; $88.88 would be subject to depreciation recapture and subject to ordinary income tax rates. If I die then the beneficiaries would get a step up in basis When the trustor dies and the MLP units have a zero basis, the beneficiaries generally receive a step-up in basis to the fair market value of the units at the date of death (in this case, the current share price of $98.64). This means the beneficiaries’ new cost basis will be the value at death, eliminating the prior adjusted zero basis for tax purposes. Because of this step-up in basis, there would be no depreciation recapture or previously deferred income to report as ordinary income upon eventual sale by the beneficiaries if they sell near the date of inheritance. The step-up effectively resets the basis, wiping out the built-up deferred tax liabilities (including depreciation recapture at the partnership level). Gains realized after inheritance would be based on the difference between the stepped-up basis and the sales price. How cool is that !