Investing 102

[GregWeld]

Originally Posted by WSSix

So if this deal is approved, does that mean those of us who owned KMP will be cut a check for $10 per share and have it sent to us? Will it be received simply as a payout like the dividend is/was? I wonder what the tax implications are since KMP was an MLP. Not knowing any better, I'm looking at the shares received in KMI and cash payout as a return for the sale of the business I am a partner in.

You will receive the appropriate amount of shares in KMI... some 2+ for 1... and yes -- a cash payment deposited to the account holding your shares of $10.77 per share you hold in KMP.

That will be treated as a return of capital - which is how a MLP does things. So it's not a gain and while I'm not an accountant -- I don't think it's taxable.. but it depends on how the paperwork goes for the transaction. If they SELL the shares to KMI it might be taxable --- but I'm thinking they're doing a dissolution of KMP and giving you back your $10 and then swapping the balance for the new KMI.

These things can change - so up until it actually happens -- it's fluid.