Sorry if this topic has been asked before, but does anyone know if ETP can be a postion held in a ROTH IRA? If so are there special restrictions? Thanks for any input.
I hold them in my Roth and my 401K plan. They have made it easy if you use Turbo Tax. It's as simple as going to ETP's website and downloading it right into the Turbo Tax software. They already have a button to click on for Turbo Tax. Worked great. Filed all required paperwork and hold info for upcoming years...real easy. Great place for both MLP's and REIT's (NLY/AGNC).
Keep saving... We'll all need it when they finidsh spending all our Social security we've been paying.
Hey-great post and you know full well what happened in Canada. I was in those CANROYS at the time and it indeed was painful. The most never recovered. By far the biggest risk in general here is not the tax code irregularities but that the govt will do something like the Canadians and change the structure big time. The sad thing is that Harper a conservative promised not to change anything and beat up the liberals on this point and won by lying through his teeth. I have to admire his style however making the change on Halloween night the ultimate trick or treat! Still like UAN and RNF because I am just a dumb Iowa farmer. (Since I was a kid land here has gone from $500 to $15000 an acre, to heck with the stock market!)
A couple of facts -
The $1000 is per IRA if it is Roth/regular. Thus $1K each. Also negative UBTI from one company does not offset positive from another.
On the 990T, the custodian is supposed to fill it out, but there is absolutely nothing to prevent YOU from doing so. You might want to do this to establish a negative UBTI carryforward and not have to pay if UBTI goes positive in a future year. The 990T takes about 5 minutes to fill out.
I have indeed filed 990Ts for years to cover myself. takes longer to print the form and put in envelope than to fill it out.
Yes, there are issues on the sale of MLPs inside an IRA, but since that situation is in conflict with the remainder of the tax code relating to IRAs it has not been enforced anyplace I have ever found. The general opinion is that is going to change with the large number of investors moving assets to MLPs. Govt. is indeed looking for money- YOURs and MINE.
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?
Yes you can, I hold many in both my Roth and Rollover IRA , there is no forms to submit, I have never had the UBT go positive over the last 15 years, and there is no reason to think it will going forward. Even if it did no big deal, still beats the heck out of waiting untill the last minute every year for the K-1 to come and then filling out the tax forms is a real hassle I didn't want, been there done that and don't care to do it again. Plus if you hold them for a long period of time when you sell them you would have to pay gains tax on the full amount because you basis changes every year, got stuck with bill one year on three of them in the taxable account.
There sure is some bad information being provided. First - a Canadian stock held in a IRA is now exempt for the 15% withholding tax.
Second, you certainly do have taxes on the sale of a MLP and some of it at ordinary income rates; but UBTI can and does go positive in surprising ways. The predessors of EPD were negative except in 1997 when there was a huge positive number. Same for APL last year. The other problem with stuff in an IRA is that ALL money is at ordinary income rates. You get no capital gain treatment at all.
Haha too funny! I throw mine away too. As an individual investor if I'm ever audited my plan is to play dumb. The whole process of MPL's in an IRA, K-1's, UBI, even the experts aren't experts.
Think you need a new CPA. You need to file a 990T to preserve any negative UBTI numbers going forward to offset positive UBTI in the future.
MLPs do NOT seek to generate negative UBTI. It is simply a function of large depreciation $$ and a number of storage and E&P MLPs generate (historically) positive UBTI. Others occassionally come up with surprises.
The only MLP that does not allow holding by a Roth (that I am aware of) in BWP.
I hold ETP in my rollover. the K1 this year had a negative UBTI. it is my understanding that most of these MLP shoot for negative UBTI. I also hold CLMT and it to had negative UBTI,But thats the last 2 years