Because of UBTI, my advice is to never hold an MLP in an IRA or any other tax-sheltered account. If a given IRA collectively has partnership interests in more than $1000 UBTI there are tax consequences. (I'm told) Don't assume just because you got $1000 or less in distributions that your partnership interest also is on the hook for $1000 or less UBTI.
It can be a headache. Seek tax advice. Do your own research. I am not a tax/accounting professional. And many other caveats as well.
I am the NY resident and am thinking about investing in CODI. Is that correct that my state tax liability will arise in each state where CODI has subsidiaries and also in CT and NY? Can someone who is a long-term CODI shares holder advise me on this matter, please? Thanks
Wow vmb, you are THE NY resident? Has the rest of the state been annihilated, then? haha Seriously, that seems to be a common mistake with non-native English speakers.. you should say that You are A NY resident (one of many). Good Luck to All
It is my understanding that you can receive $1000 in distributions from a company such as CODI in an IRA each year.Anything beyond $1000 in a given year trigers tax consequences.The distributions received by the IRA,if $1000 or less from these kind of interests,are not taxed untill the money is withdrawn.This is my understanding,but an accountant may be more helpful in how these kinds of distributions are handled for tax purposes.
I have CODI in my SRA through work, and I've collected 2 dividends so far. One of them I kept as cash and reinvested in other securities. The other I told them to re-invest.
As far as taxes, it depends on the type of IRA you have. If it's a ROTH, you get the dividends tax free. If it's traditional, it's taxed. All of this happens on / after retirement however, as you take your distributions. If you withdraw early, I believe there is a penalty no matter which type you have. I only have a ROTH, and I'm allowed to take out as much as I've invested for the year without penalty (eg, I have to leave all gains alone).