Thanks for the reply and the disclaimer although you have absolutely no liability for posting on this board. Your citing of the section covering this was what really helped. I read it and made my changes from this regulation and then copied it for my files on this tax year. I am going to ask Fidelity if I can limit ability to loan these units in my margin account. If not, then holding all of these in the non margin account is only option. I have seen enough with this issue including APL applying deferment amounts as ordinary income to a short term transaction which I held for five days. These need to be put away and held until one can't justify holding any longer. Moving money in and out of these along the way is not adviseable in my opinion. You have cited one more consequence with the lending of units to further cement my opinion. THanks.
Glad I could help. Remember though, what I post is my opinion and although I usually try to back it up with IRS docs, guidelines, etc, check with a source you trust before acting on it, because I don't claim to be an expert on taxes (or anything else). MLP taxation is quite complicated as we all have found out and there is a lot of misinformation out there. I think TT does a great job (except for partial sales of MLPs which they don't handle), but you literally have to know which buttons to push.
As far as the margin accounts - I have one with Ameritrade. Their website states you can prevent lending of your holdings in 2 ways. Either pay down your margin debt OR send them written notification via USMail that you do not want any securities loaned. I'm sure different brokers have different rules though. Having your MLP units lent sounds like a real bad idea.
probably all those that got out the day before,lol, seriously, a lot of sellers today and a lot of day traders covering, my shares were borrowed 3 times in last week for short sellers. Others were just trying to pick up a good deal, some sold out thinking it was going lower and when it didnt they got back in, but a lot of value boys today. Me, I got mine yesterday morning within pennies of the low, feeling real good, called it to go over 6.20 today after I bought and it pleasantly surprised me on high side. By May 1, my guess is this is back in mid 7 area. Just think what happens when distribution is reinstated after seeing what happened to VNR today on their distribution, I am excitedly waiting.