Annual 1099-DIV
2015 Common and Preferred Stock Tax Information
Updated as of January 19, 2016.
CorEnergy provides the following tax information to its common and preferred stockholders pertaining to the character of distributions paid during 2015.
For a common stockholder that received all distributions in cash during 2015, 72 percent will be treated as ordinary dividend income (Box 1a) and 28 percent will be treated as return of capital (Box 3). Of the ordinary dividends, 2.69 percent will be treated as qualified dividend income (Box 1b). The per share characterization by quarter is reflected in the sample Form 1099-DIV below.
Common Stock
Record Date |
Payable Date |
Total Distributions Per Share |
Total Ordinary Dividends Box 1a |
Qualified Dividends Box 1b |
Total Capital Gain Distributions Box 2a |
Nondividend Distributions Box 3 |
2/13/2015 |
2/27/2015 |
$0.6500 |
$0.4680 |
$0.0126 |
$0.0000 |
$0.1820 |
5/15/2015 |
5/29/2015 |
0.6750 |
0.4860 |
0.0131 |
0.0000 |
0.1890 |
8/17/2015 |
8/31/2015 |
0.6750 |
0.4860 |
0.0131 |
0.0000 |
0.1890 |
11/13/2015 |
11/30/2015 |
0.7500 |
0.5400 |
0.0146 |
0.0000 |
0.2100 |
Total 2015 Distributions: |
$2.7500 |
$1.9800 |
$0.0534 |
- |
$0.7700 |
For a preferred stockholder that received all distributions in cash during 2015, 100 percent will be treated as ordinary dividend income (Box 1a) and 0 percent will be treated as return of capital (Box 3). Of the ordinary dividends, 2.69 percent will be treated as qualified dividend income (Box 1b). The per share characterization by quarter is reflected in the sample Form 1099-DIV below.
7.375% Series A Cumulative Redeemable Preferred Stock
Record Date |
Payable Date |
Total Distributions Per Share |
Total Ordinary Dividends Box 1a |
Qualified Dividends Box 1b |
Total Capital Gain Distributions Box 2a |
Nondividend Distributions Box 3 |
5/15/2015 |
6/1/2015 |
$0.6351 |
$0.6351 |
$0.0171 |
- |
- |
8/17/2015 |
8/31/2015 |
0.4609 |
0.4609 |
0.0124 |
- |
- |
11/13/2015 |
11/30/2015 |
0.4609 |
0.4609 |
0.0124 |
- |
- |
Total 2015 Distributions: |
$1.5569 |
$1.5569 |
$0.0419 |
- |
- |
Box 3: |
Nondividend distributions are nontaxable and considered return of capital to the extent of your basis in our stock and then capital gain to the extent of the distribution exceeds such amount. |
If stockholders participated in the company sponsored dividend reinvestment plan, the tax basis of shares
acquired is the greater of the purchase price or the market close price on the payment date.
Nothing contained herein should be construed as tax advice, consult your tax advisor for more information.
Furthermore, you may not rely upon any information herein for the purpose of avoiding any penalties that may
be imposed under the Internal Revenue Code.
Tax Features
Company Tax Features
CorEnergy elected effective for its 2013 tax year to be treated as a REIT for federal income tax purposes. Our REIT election, assuming continued compliance with the applicable tests, will continue in effect for 2014 and subsequent taxable years.
REITs are generally not subject to Federal corporate income taxes on net income distributed to stockholders. This treatment substantially eliminates the "double taxation" (at the corporate and security holder levels) that generally results from investment in a corporation.
A REIT is generally required to distribute during the taxable year an amount equal to at least 90 percent of the REIT taxable income (determined under Internal Revenue Code section 857(b)(2), without regard to the deduction for dividends paid). If the minimum distribution requirement is satisfied, the REIT is generally entitled to a deduction for dividends paid. Stockholders are then required to report the REIT dividend as ordinary income. A REIT stockholder's receipt of dividends generally will not qualify as qualified dividend income or for the dividends received deduction.
Stockholder Tax Features
CorEnergy stockholders hold stock of a corporation. Shares of stock differ substantially from partnership interests for federal income tax purposes.
Stockholders recognize income only if CorEnergy pays distributions from current or accumulated earnings and profits allocable to the particular shares held by a stockholder. Earnings and profits are treated generally, for federal income tax purposes, as first being used to pay distributions on preferred stock, if any, and then to the extent remaining, if any, to pay distributions on common stock. Such distributions will be taxable to a stockholder in the current period as dividend income. Distributions that exceed CorEnergy's current or accumulated earnings and profits constitute a tax-deferred return of capital to the extent of a stockholder's basis in its stock and then as capital gain.
Dividend income will be treated as either "ordinary dividend income" or "qualified dividend income" for federal income tax purposes. Qualified dividend income is eligible for reduced capital gain tax rates if the stockholder meets the holding period requirements. Currently, the maximum rate for qualified dividends is 20%. Dividend income (other than qualified dividend income) is treated as ordinary income, subject to a maximum income tax rate of 39.6%.
For taxable years beginning after December 31, 2012, a 3.8 percent tax will generally be imposed on the net investment income of certain individuals with a modified adjusted gross income of over $200,000 ($250,000 in the case of joint filers) and on the undistributed net investment income of certain estates and trusts. For these purposes, "net investment income" will generally include interest (including interest on our debt securities), dividends (including dividends paid with respect to our stock), annuities, royalties, rent, net gain attributable to the disposition of property not held in a trade or business (including net gain from the sale, exchange or other taxable disposition of shares of our stock) and certain other income, but will be reduced by any deductions properly allocable to such income or net gain.
There is no assurance that CorEnergy will make regular distributions or that the company's expectation regarding the tax character of its distributions will be realized.
Upon the sale of stock, a stockholder generally will recognize capital gain or loss measured by the difference between the sale proceeds received by the stockholder and the stockholder's federal income tax basis in its stock sold, as adjusted to reflect return(s) of capital. Generally, such capital gain or loss will be long-term capital gain or loss if the stock were held as a capital asset for more than one year.
Report of Organizational Actions Affecting Basis of Securities
Effective January 1, 2011, issuers of corporate securities must complete Form 8937 to report organizational actions, including nontaxable distributions that affect the basis of the securities involved in the organizational action. The information contained below is intended to satisfy the requirements of public reporting under section 1.6045B-1(a)(3) and (b)(4) of the Treasury Regulations.
2015 Form 8937
2015 Reverse Stock Split Form 8937