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Kinder Morgan Energy Partners Message Board

  • jrad52 jrad52 Mar 19, 2013 3:27 PM Flag

    Surprising UBTI disclosure

    There are already 34 messages in the last UBTI thread, so I started a new one. This does not directly relate to KMP (I own KMR), but it's interesting.

    I guess I'm guilt of not reading every line on the attachments to the K-1s I get, so I was surprised to read the following: first, on NTI's K-1 - "Amounts included on Line 20V (Unnrelated Business Taxable income) represent only your share of allocable income/loss from the Partnership. Please consult your tax advisor regarding inclusion of other items (e.g., depreciation recapture upon the sale or disposition of your units."

    And today from UAN's K-1 "If you are a tax exempt entity and require additional information with respect to the portion of your capital gain (loss) that would be deemed to be unrelated business taxable income (UBTI) please contact Partner DataLink..."

    I haven't checked my other K-1s, but maybe MLPs are getting religion and actually warning people about UBTI on sale. Or maybe the IRS is finally starting to act. Like with the question on the K-1 this year that asks if the partner is an IRA.

    And now another warning that I have not seen before. This one has nothing to do with IRAs; it's for taxable accounts. UAN states "Certain states (my comment - of course, UAN doesn't say which ones) may require that nonresidents apportion the gain on sale of partnership units to their state." They go on to tell you to talk to your tax advisor. I know New York has such a rule, but fortunately most MLPs have no operations in NY.