to add one more issue to this fine discussion (and the bottom line is TRY to learn all the implications of MLP investing in an IRA before you invest, this that possible ?) i have seen conflicting info on whether the $1000 UBTI is the TOTAL you can have or the TOTAL per IRA account. The 990 instructions say from ALL sourses and IRA's are included in the list of types of accounts that the UBTI applies to. It is not clear (to me at least) in the instructions if you have say 10 IRA accounts that the limit could be $1000 per acoount or 10,000 ???
Also in theory (per the instructions) the investor DOES NOT make out or file the 990s. The IRA custorian does. I have asked one of my custodians about this and could not get a straight answer as to whether they would even do it for me or not. I have also seen comments on threads that some custodians put in the fine print that they do not do 990s. I must confess that I have never read the fine print that you sign up to, just scanned it. And yes I have read of numerous investors that make out the 990s and send them to their custodians or send them directly to the govt with their individual tax return. One guy on investor village claimed to have been in MLPs for some 20 odd years and had sent stuff directly to the govt. And As some one pointed out there is at least one excellent article on SA on this subject. Also info on the net at the MLP investors site. Another note---one of the comments here is the sell the MLP and its all UBTI thing (obviously differing opinions here depending on who you read) but it does not matter BECAUSE it has never been enforced!!!!, don't we have a great tax code !!!!, will be ever see a flat tax portion of the code where the 50% who do not pay a dime will at least have to pay something?