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Calumet Specialty Products Partners LP Message Board

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  • ltbhdollars ltbhdollars Oct 7, 2011 1:25 AM Flag

    Unrelated Business Taxable Income (UBTI)

    You do know its your responsibility to forward all K-1s to your IRA trustee each tax year? Has your trustee filed each year to preserve any negative UBTI carryforward? Also the $1000 is not a filing threshold but a deduction available only when you file.

    1) the PTP passive loss rule of IRC Sec. 469(k)(1), says that you cannot net a loss from a PTP against any other income except for ordinary income from that PTP (at least until you sell your entire interest in the PTP, which releases all suspended losses).

    2) the general PTP passive loss rules of IRC Sec. 469(k)(1) allow the loss from a PTP to be carried forward and then available to offset income from that particular PTP in a future year.

    Therefore negative UBTI this year from a PTP gets carried forward and is available to offset positive UBTI from that same PTP in future years, provided a filing is made to preserve the negative UBTI.

    The above are the IRS sections that define how UBTI offsets must be applied and they disagree with your interpretation ... personally I choose to follow the regs.

    Readers can look up the appropriate IRS regs and satisfy themselves as how to proceed and with that I have no more to add to this thread.

    It should be noted that the work to dig out and describe item 1 and 2 was not done by myself but by a most helpful CPA and tax preparer.


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