odyd

Pattern Energy Group Inc. (PEGI)

193 posts in this topic

6 hours ago, heliostat said:

If its OK to ask this - any non us PEGI holders here? Wondering if your broker /custodian accepted the Form 8937 (ROC) and as a result did not deduct withholding tax ? or do you have to get it back  later (?when?) .

 

I received distributions from 8Point3 and Terraform Global in 2016. At the time I received them they were classified as qualified dividends, but towards mid-February 2017, when my broker issued the tax information (1099-DIV) they were reclassified as ROC and adjusted accordingly from my trades (the amount of the dividends reduced the cost basis of my holdings). It was at that time that I knew the dividends were treated as ROC and adjusted the cost basis accordingly. 

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6 hours ago, heliostat said:

If its OK to ask this - any non us PEGI holders here? Wondering if your broker /custodian accepted the Form 8937 (ROC) and as a result did not deduct withholding tax ? or do you have to get it back  later (?when?) .

 

I'm not sure about PEGI case, but I have tax free account and I think there are bilateral agreements between countries for this. Normal is that 15% (some agreement have different rate though) is deducted by the country where the dividend was paid from to my country and then my broker can claim that back and credit my account back those 15% a few years later.

 

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Thanks for these comments. In my case there is a tax treaty which reduces the withholding tax to 15%  but in the case of tax free dividend there should be no tax deducted. I received  a TERP dividend (?late 2015 - cant remember) which was called a 'distribution ' electronically and no tax deducted.  The form 8937 that PEGI has on the website  (plus their K10 ) confirms non taxable, except that the brokers custodian chose not to accept the 8937 arguing it was based 'on reasonable assumptions' (allowed by the IRS) but would only become incontrovertible once annual P&L known.  Its an annoyance and an issue for all the Yieldco's i know and all tax advantaged dividends  as have to wait .......till annual P&L, which makes the costs of the Form 8937 seem a waste. If anyone knows an authoritative statement from IRS on whether custodians /brokers have to act in good faith on 8937 statements would be useful. I have scoured IRS website but cant find the killer quote to send to custodian. If anyone has gone through lodging a claim with IRS for refund of 'overwithholding' as they term it  -love to hear !

 

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Yes it's annoyingly complicated. All I know is that when foreign tax withholding applies for the security distribution in question between the two countries then for my tax free account it seem I have to accept a 15% withholding until my broker has been able to claim it, which takes years.

 

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I submitted second article on yieldcos, hopefully it will be published tomorrow.

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Thanks Robert , very good article. Feel more comfortable if PEGI payout ratio moves lower over time. I think the $100m for devco could be strategic if not too soon (say 2018-19 ) and preferably with more visibility re sponsor finances (unlikely to be forthcoming) as the sheer volume of solar/wind going forward then will I suspect float most boats at a minimum and so far feel managment quality at PEGI is good. Assume this greater dynamism despite your reservations underlies your portfolio tilt to PEGI relative to NEP?

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Hi Heliostat,

The opportunity to grow and having a solid plan is what holds me in place with PEGI. During the conference, the solid plan did not sound solid to me. Those pieces of info will be critical to deciding to continue to hold. A lot of people sold the stock so some could be most share a concern. I can't imagine selling a yieldco stock because of low revenue per quarter, why anyone would care?

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Thanks for the writeup odyd--although what I read did not convince me to invest in any yieldco at this point.  Maybe I will take another look a couple days after fed raises rates...

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