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EV Energy Partners LP Message Board

  • hlchlc1234 hlchlc1234 Sep 21, 2009 9:27 PM Flag

    Re MLP's in a Roth IRA

    Old timers may remember a poster on these MLP boards who sent by the name of BADBERNANKE. He know more about MLP's than anyone and everyone went to him for info and analysis. He said that Roth IRA's were no different than regualr IRAs when it came to utilizing tax benefits. I recently came across the following from a 2005 tgreatise on MLPs by Wachovia Capital Markets, Equity research Dept. "Technically MLP's can be held in an IRA but we wouldn't recomment it. Income from MLP's and other sources of UBTI that exceed $1000 per year in an IRA would trigger adverse tax consequences for the plan sponsor. Therefore income exceeding $1000 would be subject to tax. There is potential legislation that would allow traditional IRA's (this would not apply to Roth IRA's) to invest in MLP's without being subject to UPBI>" Apparently that legislation was never passed.

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    • FYI,

      For me it is a good fit in my ROTH IRA.

      From a Seeking Alpha article on topic


      A lot of people will tell you that MLPs aren’t appropriate for IRAs and other tax-sheltered accounts. If you have hundreds of thousands of dollars in MLPs, that may be true. But the advice actually stems from a relatively remote possibility for most of us. That segment of the distributions designated as ordinary income will be considered Unrelated Business Taxable Income (UBTI) by the IRS, and subject to tax. But UBTI is typically such a small percentage of total distributions (and it won’t be taxed as long as the amount of UBTI from all holdings doesn’t exceed $1,000 annually) that it is seldom a consideration for many investors.

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