I bought TNH and sold it without ever receiving a dividend (made a nice quick buck). I played it right because I spent hours and hours researching TNH. However, I didn't realize TNH is a MLP. Did I just make my tax return a headache? I'm not looking for tax return advice but will I receive a K-1 now? Will I receive a tax document for each state TNH operates in? Or because I avoided the dividend, will it just be regular short term capital gains?
Any help would be greatly appreciated. Thanks.
I own 12 MLP's. If you received no distributions yiu have nothign to worry about. Even if you did receive, it would have to be more than 1.000 dollars and even then not likely because of things that would take me too long to explain on this site. good luck
Since he is talking about his tax return, he is clearly meaning in a taxable account. So your reference to UBTI is not relevant. The poster's concern is that he will have to deal with a K-1 since he probably is not familiar with them. As I stated before, you will receive a K-1 even if you did not collect a distribution (except that you may not receive one if you did not hold over a month end if the MLP does their accounting on a month end basis).
Depends how long you held it and whether you held over a month end. Receiving a distribution does not determine whether you receive a K-1 or not. If you held just a few days and not over a month end you may not get one or get one with all zeros. If you held longer or over a month end you probably will.
As for state tax, I think TNH only operates in one state, and even for those MLPs which operate in many states, most holders do not exceed the filing thresholds in other states unless they are large holders.
If you receive a K-1 (with non zero values) then the same is not just short term gains. You need to use the sales schedule in the K-1 to calculate your basis adjustments.
Biggest problem for you is that TNH tends to be late with K-1s. Last year it was not till April just a week or so before filing deadline. So you may not know whether you are getting a K-1 till just before the deadline.