MEMP

[dan_s]

Memorial Production Partners LP (MEMP): An updated profile and forecast model has been posted under the MLP tab.

This is my #1 rated upstream MLP. Read the profile and study the forecast model and you will see why. This one has HUGE growth potential for us and (what I like best) a lot of crude oil production.

Current yield is 9.2%, but DCF is going way during the second half of this year.

DCF = "Distributable Cash Flow", which is the most important stat for MLPs

[letitfly]

Dan
You mentioned that you are buying MEMP in your IRA. What are the UBTI issues, if any?

[dan_s]

UBTI is "Unrelated Business Taxable Income".

Read this: http://seekingalpha.com/article/1302661 ... at-in-iras

[setliff]

excellent article, dan, thx. cleared the air for me. I still have one question, however.

if an mlp, say vnr, is held for many years before selling would the tax be only on the cap gains of vnr, or would there also be a huge tax bill on all the distributions?

tia, jim

[setliff]

never mind, I just read this posted under "the view from Houston"

<Just a personal choice and then I don't have to mess with the k-1's at tax return time. Keep in mind that the non-taxable portion of cash distributions from MLPs is deferred "ordinary income", which must be recaptured as ordinary income when you sell them. The benefit of capital gains treatment is lost in an IRA, so most of the "Growth Stocks" are in my regular accounts.>

this really bothers me as it could really be a big hit in the future and at my age a nightmare for my heirs.

[dan_s]

Leave all the money to me and your heirs won't have to worry about it!

I used to worry about leaving some money to my sons and now my goal is to spend it all before I die. Maybe with daughters it is different.

[par_putt]

You can also give it to them now and you don't have to worry about it...

[letitfly]

OK, I understand what UBTI stands for and took a look at the article you referenced---------but, will the UBTI be negative from MEMP, if you know?

[dan_s]

All of their taxable income is UBTI, but most of their income is sheltered (non-taxable). For 2013, ~80% of distributions were non-taxable. They can't know for sure until they file their tax return, but my guess is that at least 50% of the distributions will be non-taxable.

[bobs]

Dan
Your thoughts on the drop after the offering??