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MarkWest Energy Partners, L.P. Message Board

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  • buyandwin buyandwin Mar 13, 2012 12:13 PM Flag

    What is this offering priced at?

    PT117:

    >>>I talked to TD AMERITRADE this morning, and their thoughts were if I am in a IRA acct I only will be taxed on my withdrawals, not my profits that go into my account. I know nothing about taxing on a MLP..any help would be welcomed..probably older than most, but young pup when its comes to MLP's. Again tired of the up's and down's of normal stocks..I hate to lose lol <<<

    The advantages and disadvantages of investing MLP's in IRA's has been discussed many times.

    IMHO investing MLP money in IRA's are wrong because you lose all the tax advantages of investing in MLP's by doing so in an IRA. The distributions and growth will bloat your IRA and when you reach 71 1/2 and have to start taking RMD (Required Minimum Distributions) out you will be pushed into a higher tax bracket and probably have to also add payments on 85% of your SS and maybe also be required to pay AMT (Alternative Minimum Tax) Of course the more successful you are the more horrendus the taxes become.

    If the MLP investment is made in a taxable account you just might be happy in receiving ever increasing distributions for the rest of your life and leaving the MLP units to your heirs. By doing that, the cost basis of the units will be stepped up to the then value and their are no tax consequences to anyone.

    There is a lot more to investing in MLPs than investing in stocks. MWE distributions are about 80% to 90% tax deferred. That means the last distribution paid was .76. If 80% is deferred taxes will have to be paid on about.152 . If your tax bracket is 15% that will mean you will approximately pay .0228 and have .7372 of that distribution to spend or buy additional units or save. And if you don't have a need to sell there is no other tax to be paid by you or your heirs.

    Think about that before you listen to TD Ameritrade (By the way, they are my broker also). The person you spoke to at TDA doesn't have a clue as to what I'm saying

    good luck
    b&w