I'm wondering regarding tax loss harvesting on MLPs.
Wonder if arb is back from vacation yet.
Details were posted on the CEP board.
Want to understand whether it is necessary to have zero units either at year end, or at time of sale, in the case where there are no deferred passive losses to recoup.
What happens if you double up, wait 30 days to avoid wash sale and then sell the original position?
This is my default stategy with tax loss harvesting for c-corps, but will it work for MLPs?
I understand the recapture tax impact of selling, that is not the question.
I also understand that you need to sell a full position in order to release deferred passive losses, but in this case there are no deferred passive losses.
Is there any other reason I would have to have zero units on the last day of the year?
And is there any reason why it would be better to reverse the order of the transactions, ie.
-sell then rebuy 31 days later, versus
-double up, then sell the original position 31 days later?
In one case, I completely dispose of the partnership interest for a month, in the other I never completely dispose.
There aren't that many candidates for tax loss selling in MLPs, however CEP is one since it hasn't paid distributions for years (therefore not much distributions to recapture) and it doesn't have deferred passive losses (in fact has had positive income every year).
No, I don't. I receive 40 K-1s per year and have no trouble handling the taxes.
There should be a simple answer to this.
If I don't get one, I will plan to sell the position in question in mid December and re-purchase 31 days later in mid January.
That will certainly do the trick since I will have avoided a wash sale and I would have entirely disposed of my entire partnership stake as of the end of the tax year.
I'm just not certain whether it's really necessary to take that precaution in this case (meaning where there are no deferred passive losses involved).