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Calumet Specialty Products Partners LP Message Board

  • zbgb952 zbgb952 Mar 17, 2013 12:46 PM Flag

    HELP!! what should i do if my broker says they don't deal with MLP ubti in an IRA

    I believe I may have ubti in my IRA for 2012. Most have negative but ubti, but 3 of them have positive UBTI that tallies to 3-5000$. I called my broker, which is one of the largest and they told me 1. they don't know what that is, 2. they don't do taxes, and 3. I should talk to my 'tax advisor'. I don't have a tax advisor..and it ticks me off that such places always make this comment. What should I do? Should I call the IRS about it?

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    • I just filled out my Federal tax with TURBO TAX , and according to them K 1 do not apply to IRA accounts. I have also heard the opposite opinion, but Turbo Tax says they will back up their calculations! If they are wrong, I will get them to file an amended return at their expense, and pay any tax due !

      • 2 Replies to trimconnect
      • You misunderstood what Turbotax is saying.
        It is not saying there are no UBTI issues for the IRA.
        It is simply saying that Turbotax only handles your individual tax return for your taxable accounts.
        IRA tax issues (other than withdrawal of funds from the IRA) is not within the scope of Turbotax.
        The Turbotax guarantee you speak of is not applicable in this case.

      • my personal position on K-1 reporting or any reporting for that matter with regard to an IRA account (except for distributions, that is) is that I am not doing it. come what may, i'm not dealing with it. i'm not going to report it. the whole idea of having an ira is to not pay taxes until distribution. fwiw, i'm no accountant, tax pro or lawyer, i'm just stating my own way i'm going to handle it if it comes up.

    • A pieve of advice you didn't ask for. I just got my K-1 for NTI, another refiner MLP that went public in the second half of 2012. It also showed a good chunk of positive taxable income on Line 1, all of which is also UBTI.

      I'm guessing that all the refiner MLPs will show a lot of taxable income and UBTI in 2013. CLMT will show a full year's operations from Montana and Royal Purple, and most of a year's worth of income from the San Antonio operation. So if you are concerned about UBTI, I would guess than CLMT will be a bigger problem in 2013 than it was in 2012. You might want to sell CLMT in your IRA (and buy it in a taxable account if you like it.)

      You shouldn't let taxes drive your investing decisions, but you seemed really concerned about the UBTI issue.

      • 1 Reply to jrad52
      • Hello JRAD52...the 3 mlp's i have showing positive numbers in box 20v are memp, clmt and pse. When I subtract 13J and 20T1 from 20V in memp and pse, the number becomes negative. There doesn't appear to be any 13J or 20T1 for clmt, though...but the 20v number for clmt alone is between 8-900. All my other mlp's in the ira show negative numbers. Does this mean i should be ok regarding possible ubti taxes?

    • 2 answers. Your broker is the trustee of your IRA and I don't think anyone other than your broker can file the 990-T for the IRA, if the tax return is actually required. If there's a problem, you're going to have to continue talking to them. The problem is that if there is a tax liability, the money has to come from the IRA itself. If you file the 990-T and pay the tax on your own, you have just made a contribution to the IRA, which may cause problems. If you take money from the IRA to pay the tax, you have just made a withdrawal, which is taxable. I think only the broker can handle the tax filing, if the tax return is actually required.

      Second - you say you have 3 K-1s that show UBTI of between $ 3,000 and $ 5,000. I assume 1 of these is CLMT, or else you wouldn't have posted on this board. My CLMT K-1 showed a lot of UBTI so I assume that's 1 of your problems. What are the other 2? Are they oil & gas producers, such as BBEP, PSE, LINE or the like? If the answer to this question is yes, there may be deductions on the K-1 you are missing.

      • 3 Replies to jrad52
      • good response. the broker has to file. ask to talk to someone there who knows something. Often customer service folks are not knowledgeable.

      • 1. Don't ask your broker for tax advice--do you ask your lawyer for medical advice?

        2. You have a month, more or less, to get this sorted. Stop panicking.

        3. Ask around among your family and friends for a tax adviser. Take the 2-3 names that keep coming up as being good and "interview" them. Find one you like, who is knowledgeable in the areas you need (MLPs and whatever else).

        4. You can call the IRS but (a) your going to be talking to someon who likely doesn't know squat about MLPs either, and (b) they tend to give wrong answers and you can't use the fact that they gave you bad info as a defense if they get it wrong.

        Best of luck,


      • Hello jrad52. The 3 k-1s that show a positive ubti number in box 20v are pse, clmt, and memp. I believe that you answered the PSE situation for me at the PSE board. THANKS MUCH!!!..using your formula, it appears that my real ubti is negative for pse as you say it is for you.

        What about CLMT? I notice in my clmt K-1 that box 20 V IS ALSO THE SAME AS THE VALUE IN BOX 1. Do I need to do any adjustments for this as well, like for PSE?

        What about MEMP? I notice in my MEMP k-1, box 1 is 537. Box 20v refers me to a statement. When I look at the statement I see the following:
        20 V1 Unrelated Business Taxable Income (UBTI) 537
        20 V2 Gross Receipts for UBTI 1290
        20 V3 Gross Deductions for UBTI 752

        so there are 3 V's...and 20V1 is the same value as in Box 1.

        Do I subtract anything from this 537 to get the true ubti for IRA purposes? Thx.

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