Teekay LNG Partners To Convert to Corporate Taxation

Following a trend of others Teekay LNG Partners (NYSE:TGP) will ask shareholders to approve a measure which will allow TGP to be taxed as a corporation in the future instead of as a partnership.

Currently Dynagas LNG Partners (NYSE:DLNG),  GasLog Partners (NASDAQ:GLOP) Teekay Offshore Partners (NYSE:TOO) and Tsakos Energy Partners (NYSE:TNP) are taxed as corporations instead of partnerships.

For the investor this means they will be issued a Form 1099-DIV at tax time instead of the K-1 which some investors are resistant to dealing with because of some complexities.

All of these partnerships have numerous high yield preferreds outstanding so this may simplify the lives of some income investors.

Further information on this move can be found in the companies SEC filings here.

 

10 thoughts on “Teekay LNG Partners To Convert to Corporate Taxation”

  1. This is great news and TGP preferreds can now be a component of IRA’s without the overhang of UBTI liability. In my mind, TGP is the premier LNG shipping firm with an excellent balance sheet and long term fixed rate contracts.
    I’m long.

  2. My first post but I view this website daily. Discovered it a couple months ago and really enjoy the info. I own TOO-E and I also welcome the news.

  3. Assuming the shareholders approve on Dec. 18th, will this change be in effect for the 2018 tax year or 2019? I looked through the document but couldn’t find the answer.

    1. Hi Andrew — here it is

      Intend to amend the Partnership’s U.S. tax structure to elect to be treated as a corporation, instead of a partnership, subject to common unitholder approval. If approved, common and preferred unit investors will receive Form 1099s instead of Schedule K-1s commencing in taxation year 2019.

  4. For me, the K-1 is a non issue. Use the software, folks.

    But UBTI issue is real. Except for UBTI, TGP (and similar) income issues are great for a qualified account. Problem solved.

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