In January nietmaar & redbelliedtoad both suggested that I add BWP to my coverage universe at my update site. Today I bought shares in BWP. If you two had not suggested the 'coverage' back in January, I doubt if I would have learned enough about Boardwalk to buy it today.
True, IRS code is humongous; technical aspects cannot be mastered by persons in public contact. Do not rely on anything verbal with IRS, and I'm not sure written info from a clerical/technician would suffice.
You can call the Income tax and ask them. Get the number of the person who gives you the advise and if they ever dissalow it you have your backup number of the person who gave you the information at the IRS
Although you can import this years tax data into next years return, you will have to buy the software again next year (well worth the $20). I've used both the deluxe and basic, and have decided that basic works fine for my needs, and handles all my K-1 issues ok for me.
Thank you for the information. I wish I knew about this board before I invested. This board is the first thing I now look at every morning.
I am thinking of buying a Turbotax product to try to do the tax forms for the MLP units that I own. Is this year's Turbotax software useable NEXT year also?
Thank you for any help on this matter.
I can't imagine that the income from MLP's would not be investment income. They are excluded from being passive income so you can not use them as PIG's. Even though his investment income in the first year(s) would be limited and he may not be able to deduct his full amount of investment interest, it would carryover to the next year(s).
Following is a quote from the very recent prospectus of Magellan Midstream Holdings, a limited partnership. It looks to me like you can deduct your margin interest from your MLP income:
"Limitations on Interest Deductions. The deductibility of a non-corporate taxpayer�s �investment interest expense� is generally limited to the amount of that taxpayer�s �net investment income.� Investment interest expense includes:
� interest on indebtedness properly allocable to property held for investment;
� our interest expense attributed to portfolio income; and
� the portion of interest expense incurred to purchase or carry an interest in a passive activity to the extent attributable to portfolio income.
The computation of a unitholder�s investment interest expense will take into account interest on any margin account borrowing or other loan incurred to purchase or carry a unit. Net investment income includes gross income from property held for investment and amounts treated as portfolio income under the passive loss rules, less deductible expenses, other than interest, directly connected with the production of investment income, but generally does not include gains attributable to the disposition of property held for investment. The IRS has indicated that net passive income earned by a publicly traded partnership will be treated as investment income to its unitholders. In addition, the unitholder�s share of our portfolio income will be treated as investment income."
Hmm, millions to invest, no real estate, and a 60K/year job with inexpensive pastimes? Couple that with a reluctance to seek advice from a tax professional and it would appear you are perhaps too thrifty. A reasonable suggestion might be that you (1) overcome your reluctance and go see that tax professional and (2) find more fun intensive and financially challenging pastimes.
I don't see how that margin loan can be doing you much good. I'm not a tax professional but I thought that margin interest could only be deducted under misc. Schd A expenses and you apparently don't fill out Schd A.