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Northern Tier Energy LP Message Board

  • hobbyfarmer2 hobbyfarmer2 Jul 19, 2013 5:38 PM Flag

    Distributions

    I'm new to this board and a new investor in NTI. My research in investing in MLP's indicates that only a portion of the distributions is taxable in the year it is distributed while the balance is taxable as a capital gain when you sell the shares in the distant future. Does anyone on this board know what portion of NTI's distributions are taxable? As a new investor in 2013 I have no access to a form K1 to determine what percentage of my May and upcoming distributions are taxable this year. Hopin one of you veteran NTI investors can help. Thanks!

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    • You really want tax advice from a stock board?? Consult a tax expert. I invest in an Ira and therefore have no tax consequences. If you have an Ira I suggest putting Nti in it.

      • 3 Replies to walrathcrai
      • You can only receive up to $1,000 a year in distributions in your IRA, from an MLP. Otherwise there are tax implications. You must also submit your K1 to whoever controls your IRA, prior to April 15th. Unfortunately, MLP's do not have to gurantee that you will receive your K1 prior to April 15th. Most MLP's will send their K1s prior to April 15th. If it dosn't look like you will recieve your K1 in time, you will have to pay your broker to get the K1 prior to April 15th. "Edward Jones" controls my Roth Ira. They charge $100 for any K1s that have to be forced through. And keep in mind, that $100 is 10% of the $1000 a year you get tax free. Therefor, you should only shoot for $1,000 in income from any MLP you have in an IRA. And at all times, realize that you may have to force through a K1, which will eat into your return. However, I have never had a K1 not show up before tax day.

      • "I invest in an Ira and therefore have no tax consequences."

        Well, you could do with a bit of tax advice yourself because the above statement is incorrect.
        I have never received a NTI K-1 myself so can't verify but think I heard that all the income may be UBTI (maybe I'm remembering wrong). Whether it is or not there are tax consequences when you sell the MLP in an IRA as all the accumulated distributions may be recaptured as UBTI (meaning tax payable from the IRA). I'm not sure of the specific situation for NTI in this respect since I never held it so never seen a K-1, but there are tax consequences for MLPs in IRAs and that is a reason they are often recommended to be held in a taxable account. The keyword is UBTI, you can choose to research it or not - I'm not going to get in a big argument about it. I avoid any issue by holding all MLPs in the taxable account.

      • @ walrathcrai
        Yeah I know, these message boards tend to be populated by unemployed wanna-be comedians for the most part but occasionally an educated investor shows up that might have an answer to a serious question.... so forgive me for my optimism.
        I found the answer to my question in a Credit Suisse report walrathcrai so I'm good now.
        Sorry... I cashed out of my IRA's a few years back when Pelosie started talking about taking them. I prefer to pay my current taxes as I go and NOT retire with a substantial debt to uncle sam on whatever monies may be left in it after the liberals raid it.

 
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