On our new Ticker Research Pages we put a link to the company investor relations page at the top of the list of links.
There is a reason for this. The company website should be a high priority visit if you are considering investing in a company. There is usually lots of important information there.
One of the things you will often find is a discussion of historical distributions made by the company. You should be able to tell if they were something other than regular dividends. If they are, or if you don't understand what they are saying, this should raise a flag to do some further investigating.
One clubs recent experience is a good illustration of this.
As you know, we try again and again to remind clubs that accounting tax reporting for investments in Publicly Traded partnerships is beyond the scope of the services we can provide for you. One club had learned this lesson well when they bought KMP and then had to sell it quickly to avoid problems.
However, they recently received a distribution from another investment, VNR. It was called a partnership distribution by their broker. VNR doesn't have the word Partner or Partnership in its name. It's full name is Vanguard Natural Resources, LLC. The LLC is the kicker in this case. LLC's can be taxed as partnerships or as corporations. In the first case, you get a K-1 just like you do from a partnership. It comes along with all the same issues that investing in partnerships does.
A quick visit to the VNR Investor Relations Page would quickly raise red flags. There is a link at the very top of the page that says K-1 Tax information. If you click on it, it takes you to a page that describes how they are "proud to announce ..... unitholders will be mailed
their tax year 2012 K-1 tax information the week of March 11th".
That's one of the issues with these investments. Even if you could account for all that might be reported on those K-1's, you wouldn't even have the information you needed to do the accounting until in the middle of next March.
I can understand how this club got into this by mistake. Even the fact that its name includes Vanguard is, to me, a bit misleading.
Make it a habit to stop by the investor relations pages if you're going to buy something. In addition to tax information, you'll usually find a nice description of the company's business. You might also find links to investor presentations that tell more about the status of their business and their plans for the future. They'll contain lots of interesting information in a nice presentation format that you should find easy to watch and understand.
It all helps you get to know the company you're considering taking partial ownership of. The better you know and understand it, the better you can determine whether it is an investment you want to make or want to keep.
Don't forget that we're glad to help you interpret tax information that you find on investor relations pages that you're not sure about. Just email us the ticker at support@bivio.com
Laurie Frederiksen Invest with your friends! www.bivio.com