You would have to pay ordinary income rates on the portion of the distribution which was sheltered by your basis. Any gain over your original purchase price would be a long term capital gain. Line does generate some taxable income so it would not be the entire distribution.
This of course is the hole in Gene's prattle of great trading results. It doesn't understand there is a suddenly concentrated tax bill which can easily drive an investor into the next higher marginal tax bracket.
This is why it is better to buy a put to have a floor under long held master limited partnership than to sell them. As we see writing covered calls against something which has significant embedded tax ramifications is not writing covered calls at all. Rather just selling calls.
Pure speculation on an answer, but as long as LNCO is going up that is good. Eventually, people will realize the significance of the distribution/dividend gap and re-focus on LINE. I just thing BOTH of them need Linn to come out with a few strong EOY press releases re Hogshooter etc to move them both up a few points and back to the Nov 42 level (or whenever that was) GLTA