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Eagle Rock Energy Partners, L.P. Message Board

  • branski2 branski2 Jan 2, 2009 1:07 PM Flag

    Newbie question about tax treatment of MLP's

    I've never invested in an MLP and am thinking of taking the plunge with EROC (wish I'd have done it on Wed). But, I'm confused about the tax treatment.

    From my research I've determined that MLP's provide tax advantages if held in taxable accounts and holding them in an IRA
    destroys their tax advantage. Is this correct?

    Would I be better off trying a closed-end fund? If so...anyone have a recommendation?


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    • not advisable to hold MLP's in an IRA or similar retirement vehicles. Eroc is a solid energy MLP and should weather this storm very well. The better way to own EROC is through KED which is appropriate for an IRA and holds approx. a 14% position in EROC. KED is up strong today. You might want to take a smalll position and avg. down should the XMAS rally end next week and reverse the 2-day gain.

      I have been told that you can receive up to $1,000 from MLP's inside and IRA with tax consequences but will still have to file a K-1. Check with you tax advisor.


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