Medtronic moved overseas to avoid paying their own taxes, but they continue to create tax issues for those of us left behind.
If your club owned Medtronic last year, you were first hit with capital gains to report when they moved overseas.
Now, there are complications with the dividends you've received since then. Many of you have received 1099 forms where a portion of their dividends was reclassified as a Return of Capital or "Non-dividend" distribution. That meant you had manual edits to do when you prepared your investment club taxes.
Apparently, some brokers have delayed issuing 1099's because of this. If you are waiting for a 1099 this may be a reason.
And, even if you did get a 1099 showing the reclassifications, the amounts that were reported are just estimates. Because their tax year closes in April, the classification won't be finalized until this summer when you can expect to receive a revised 1099 form.
Hopefully the revised numbers won't create any significant changes to the taxes you'll file by April 15.
But it will still be very important to update your records if you do get revised information. Return of capital or "Non-dividend" distributions affect the cost basis of your shares. They need to be updated correctly in bivio or you'll have problems matching capital gains when you sell your shares.
Laurie Frederiksen Invest with your friends! www.bivio.com
I was glad to receive your email about MDT return of capital dividends. I found
the information the day that I opened my 1099, but I think that there are many
MDT holders who will not know what to do with what they see on the 1099.
Good work, as usual!
I really will send my story, soon I hope.
Ed Berners
On 18 Mar 2016, at 12:00, Laurie Frederiksen <laurie@bivio.biz> wrote:
Medtronic moved overseas to avoid paying their own taxes, but they continue to create tax issues for those of us left behind.
If your club owned Medtronic last year, you were first hit with capital gains to report when they moved overseas.
Now, there are complications with the dividends you've received since then. Many of you have received 1099 forms where a portion of their dividends was reclassified as a Return of Capital or "Non-dividend" distribution. That meant you had manual edits to do when you prepared your investment club taxes.
Apparently, some brokers have delayed issuing 1099's because of this. If you are waiting for a 1099 this may be a reason.
And, even if you did get a 1099 showing the reclassifications, the amounts that were reported are just estimates. Because their tax year closes in April, the classification won't be finalized until this summer when you can expect to receive a revised 1099 form.
Hopefully the revised numbers won't create any significant changes to the taxes you'll file by April 15.
But it will still be very important to update your records if you do get revised information. Return of capital or "Non-dividend" distributions affect the cost basis of your shares. They need to be updated correctly in bivio or you'll have problems matching capital gains when you sell your shares.
Laurie Frederiksen Invest with your friends! www.bivio.com
Thanks, Laurie, for the alert. This will probably be a continuing problem with Medtronic, so I'm going to recommend our club sell it. We've already taken the LT cap gains hit, and I dislike companies that shirk their fair share tax paying duties. Why not invest our funds elsewhere?
Patricia Ann Essex on
Our club owns JCI, which is merging with Tyco and moving its domicile to Ireland (although operational headquarters will remain in the US.) I'm curious to
know if we can expect similar problems with the new JCI when it shifts to Ireland. What red flags are there? It seems Medtronic is complicated by its fiscal year-end date. If that had been at another time period with a longer lead time before our tax returns
are due, would the entries have been easier? Can anyone suggest the important potential complications for which we should watch with respect to a change in domicile?
Advice would be appreciated!
Pat Essex
Mt. Ararat Investment Club
Bowling Green, Ohio
From: club_cafe@bivio.com [mailto:club_cafe@bivio.com]
On Behalf Of Laurie Frederiksen Sent: Friday, March 18, 2016 12:01 PM To: The Club Cafe Subject: [club_cafe] Medtronic (MDT) Tax Joy
Medtronic moved overseas to avoid paying their own taxes, but they continue to create tax issues for those of us left behind.
If your club owned Medtronic last year, you were first hit with capital gains to report when they moved overseas.
Now, there are complications with the dividends you've received since then. Many of you have received 1099 forms where a portion of their dividends was reclassified as a Return of Capital or "Non-dividend"
distribution. That meant you had manual edits to do when you prepared your investment club taxes.
Apparently, some brokers have delayed issuing 1099's because of this. If you are waiting for a 1099 this may be a reason.
And, even if you did get a 1099 showing the reclassifications, the amounts that were reported are just estimates. Because their tax year closes in April, the classification won't be finalized until this
summer when you can expect to receive a revised 1099 form.
Hopefully the revised numbers won't create any significant changes to the taxes you'll file by April 15.
But it will still be very important to update your records if you do get revised information. Return of capital or "Non-dividend" distributions affect the cost basis of your shares. They need to be updated
correctly in bivio or you'll have problems matching capital gains when you sell your shares.
Laurie Frederiksen
Invest with your friends! www.bivio.com
if you own JCI, you will owe taxes when the two companies merge whether you receive cash or JCI PLC shares for your current JCI shares.
Whether or not you will also have dividend reclassification issues like the MDT shareholders have had is not something it is easy to know in advance. It depends on the companies tax "Earnings and Profits" which are different than their reported GAAP Earnings. They are not usually published anywhere.
You are correct that their fiscal year closing date will impact whether or not updated information will be available during regular tax reporting season. But this applies to any company.
Investments in foreign companies can bring more complications when addressing tax issues if they reorganize or even make distributions of cash or stock. They do not always provide the same level of description of US tax consequences that US companies do. That can cause delays getting your records updated correctly.
The other thing to be aware of is that there is a move to allow foreign companies to report earnings only under International Accounting Standards (IFRS). Currently, if they are registered on US exchanges they need to report under US GAAP rules as well as IFRS.
There are some differences between the two which will then make comparing their historical performance to their current results a bit more complex.
Laurie Frederiksen Invest with your friends! www.bivio.com
Thanks! I had read the corporate info you cited but wasn't sure what else to watch out for.
Pat
From: club_cafe@bivio.com [mailto:club_cafe@bivio.com]
On Behalf Of Laurie Frederiksen Sent: Monday, March 21, 2016 11:59 AM To: The Club Cafe Subject: Re: [club_cafe] Medtronic (MDT) Tax Joy
if you own JCI, you will owe taxes when the two companies merge whether you receive cash or JCI PLC shares for your current JCI shares.
Whether or not you will also have dividend reclassification issues like the MDT shareholders have had is not something it is easy to know in advance. It depends on the companies
tax "Earnings and Profits" which are different than their reported GAAP Earnings. They are not usually published anywhere.
You are correct that their fiscal year closing date will impact whether or not updated information will be available during regular tax reporting season. But this applies to any
company.
Investments in foreign companies can bring more complications when addressing tax issues if they reorganize or even make distributions of cash or stock. They do not always provide
the same level of description of US tax consequences that US companies do. That can cause delays getting your records updated correctly.
The other thing to be aware of is that there is a move to allow foreign companies to report earnings only under International Accounting Standards (IFRS). Currently, if they are
registered on US exchanges they need to report under US GAAP rules as well as IFRS.
There are some differences between the two which will then make comparing their historical performance to their current results a bit more complex.
Laurie Frederiksen
Invest with your friends! www.bivio.com
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Donna Bardis on
Pat,
Thanks for keeping me in the MAIC loop. After reading about
this merger, I suggested that my son sell his JCI now before tax
headaches & he did. I did that myself when an investment was
going to have future tax problems. I don't need those
complications.
Greetings to everyone in BG. I am nearly recuperated from my
9-hour spine surgery last June; no more excruciating pain when
standing. Yay! I just have a few limitations from not being able
to bend at the waist, & still building up my muscles after
months of disuse.
Donna
On 3/22/2016 10:33 AM, Patricia Ann
Essex wrote:
Thanks!
I had read the corporate info you cited but wasn't sure what
else to watch out for.
Pat
From:club_cafe@bivio.com [mailto:club_cafe@bivio.com]
On Behalf Of Laurie Frederiksen Sent: Monday, March 21, 2016 11:59 AM To: The Club Cafe Subject: Re: [club_cafe] Medtronic (MDT) Tax Joy
if
you own JCI, you will owe taxes when
the two companies merge whether you
receive cash or JCI PLC shares for
your current JCI shares.
Whether
or not you will also have dividend
reclassification issues like the MDT
shareholders have had is not something
it is easy to know in advance. It
depends on the companies tax "Earnings
and Profits" which are different than
their reported GAAP Earnings. They
are not usually published anywhere.
You
are correct that their fiscal year
closing date will impact whether or
not updated information will be
available during regular tax reporting
season. But this applies to any
company.
Investments
in foreign companies can bring more
complications when addressing tax
issues if they reorganize or even make
distributions of cash or stock. They
do not always provide the same level
of description of US tax consequences
that US companies do. That can cause
delays getting your records updated
correctly.
The
other thing to be aware of is that
there is a move to allow foreign
companies to report earnings only
under International Accounting
Standards (IFRS). Currently, if they
are registered on US exchanges they
need to report under US GAAP rules as
well as IFRS.
There
are some differences between the two
which will then make comparing their
historical performance to their
current results a bit more complex.
Laurie
Frederiksen
Invest with your friends! www.bivio.com