Ok, ordinary income rates on the depreciation recapture portion of the gain. That would be limited to something close to her original purchase cost. So, I guess, limiting the number of units sold each year to an amount that does not bump the seller into a higher tax bracket is the way to do it.
But my other question still should be considered. Selling just because one is retired could be a mistake. The world doesn't come to an end just because one retires.
1) At some point one needs an income source being retired, and 2) I have too much $ in KMP relative to our other investments, so if we need income it makes sense to reduce our investment there. Getting 'killed' taxwise means paying more than we have to. I have heard some sellers that were long term holders having to pay very large amounts when they sold. I just would like to not have that happen.
You should not sell KMP. I know that it would be nice to be more diverse, etc., but the cost of doing so (selling) will leave you MUCH LESS to reinvest - and probably with a lower return. Ergo: a much reduced retirement income. You really have no reasonable alternative to holding KMP until you die. Will the world suddenly stop transportina fuel via pipelines? The risk is preferrable to decimating your portfolio.