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Linn Energy, LLC Message Board

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  • badbernanke badbernanke Dec 18, 2008 11:06 AM Flag

    Question about MLPs

    It is not a simple matter to answer your question -- most tax advisors seem to say "ignore the state tax returns." That is often safe since the MLP distributions are partly non-taxable return of capital (LINE was 100% non-taxable return of capital in 2007), one major producing state (TX) reputedly has no income tax, virtually every state has a standard deduction, personal exemptions and other odds and ends that eliminate taxable income from partnerships unless you are a big holder.

    The difficulty of responding for any one individual's situation is compounded by the fact that every MLP reports different amounts of return of capital, every partnership has varying operations by state, your holding period in a year affects the allocation, etc.

    This is where the "consult with your tax advisor" caveat is always appropriate.

 
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