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Kinder Morgan Energy Partners Message Board

  • peggyherrell peggyherrell Sep 14, 2011 9:16 AM Flag

    Final word on UBIT

    I finally can report how such tax is handled on such tax liability. I hold 4 MLPs in my IRA account. I am 65 and drawing on funds from my IRA account. The IRS tells me the following:

    1/ Income tax is captured in my IRA and taxes are paid when funds are withdrawn.

    2/ Other taxes on income reported (including UBIT) are accountable to the tax ID on the K1s received each year. If your SS number is not in Part II Box E, the IRS will not associate you the the K1 and the MLP is handling such tax liability.

    MLPs are great dividend generators and should be considered in an IRA account. If you want further clarification and to verify what I have said here, Call 800 829-1040, enter option 2, then option 2, again, and option 3. An operator will select someone in your area of concern. State the following: " I receive K1's form 1065 yearly and wish to clarify my tax liability for UBIT from MLP common stock that I own."

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