Now comes the flood of warnings that you should NEVER hold an MLP in an IRA account. Of course this is bogus, not true, and of no importance if you are retired and make draws from your IRA. Note - I am speaking only about holding in an IRA after retirement. The following is verbatum from the IRS:
Final word on UBIT
I finally can report how such tax is handled on such tax liability. I hold 4 MLP’s in my IRA account. The IRS tells me the following:
1/ Income tax is captured in my IRA and income taxes are paid when funds are withdrawn.
2/ Other taxes levied (including UBIT) are accountable to the tax ID on the K1s received each year. If your SS number is not in Part II box E, the IRS will not associate you to the K1 and the MLP is handling such tax liability.
MLP’s are great dividend generators and should be considered in an IRA account. If you want further clarification and to verify what I have said here, Call 800-829-1040, enter option 2, then option 2 again, and then option 3. An operator will select someone in your area of concern. State the following: “I receive K1’s form 1065 yearly and wish to clarify my tax liability for UBIT from MLP common stock that I own”.
I agree that MLPs are great in an IRA as long as you keep UBTI under $1000 or file in negative UBTI years to preserve the loss. Most MLPs do not generate UBTI. Am sure ARB and other would agree. Arb has posted elsewhere that he has MLPs in his IRA.
My questions to you - Whose SS# is on your IRA statement? If it is not your number then how and why are you being sent someone elses statement?
What is bogus is your statement that you are not responsible becvaue you SS# is not on your statement. It is required to be there.