I have all my retirement in first a 401K which I converted into an IRA. The difference is that my broker does not withheld taxes at distribution and the bank transfer is free.
All my capital gain, MLP or US trust distribution etc. are tax free. I pay taxes on my IRA monthly distribution which I control. I am tax free because my distribution is such that I stay below the minimum tax. Does not take a #$%$ degree to figure out.
Good deal, it works that all I care.
When you sell a portion of your gain is ordinary income (in VERY oversimplified terms - the reduction between the amount you paid for your units and your current capital account basis) Should not be too hard to get an approximate gain in recapture using last years K-1. Then you pay capital gain (15% or less this year and who knows what in 2013) on the increase between the price paid and price sold. The problem is you have 15 years of deferred losses and you cannot take any of those losses unless you sell ALL your units.
If you absolutely need the income figure out the ordinary income and capital gain per unit and sell that many units to get the income level you want. I definately suggest an account to do this one.
Incidentally you do not "get killed" on taxes. You deferred paying taxes on most of your distributions for 15 years. On sale you simply get to catch up with the deferral.
Last, there is no discussion except by a WSJ author suggesting the elimination of stepup on death. There are limitations now, but both parties have agreed on this part of the puzzle to tax reform.
Why take any out? Just take the qtrly distribution, leave the shares alone. If you have been on the drip program you should be in great shape. If congress doesn't do anything stupid you should live well forever with a 15 year build up. When the kids get it they won't have to pay any large amount of tax on it either.
What about your minimum required distribution? The government tells you how much you must take out. Also two things in an IRA. First while you gain deferral, you gave up capital gains rates. Second, IRAs can and are subject to taxes if you have lots of MLPs inside. I am guessing from your comment your IRA is rather small to be able to pay no income taxes at all.
I live quiet well with my retirement and the distribution of my IRA. I control how much I take out so I take enough and do not pay any taxes. I live quiet well and travel 6 month a year cannot complain. Bottom line it is all legal I suppose in 10 to 15 years my IRA will be down to nothing, but by then will I be around?