Why would you want to pay tax when you sell an MLP in a traditional IRA, and then pay tax again when you take an IRA distribution? UBTI is generated on an annual basis (although usually negative or minimal). But the recapture upon sale which is also UBTI, can be significant depending on how long you have held the position
That's odd, my Fido shares showed up 40.21 - got the 5% discount in August so should have gotten this time as well. I'll give them a few days to correct and then inquire if no change. Official dripprice is not on website yet.
According to yesterday's article on WSJ, the problem with UBTI is more when you sell your position. Evidently several thousand people who held KMP in an IRA are now receiving tax bills resulting from UBTI generated when KMP was merged into MKI. That was effectively a final sale of their partnership interests
Once your basis gets to zero, distributions are taxed as CG. Distributions, negative op earnings (K1 Box 1), depletion, and Intangible drilling costs decrease basis, positive op earnings increase it. I remember a couple of the good years when EVEP (unlike most MLPs) actually produced taxable income for unitholders. That also produced the dreaded UBTI for those holding in an IRA Not lately though. You can check your basis on the annual K1
Who is issuing the "massive tax bills"? Certainly those holding KMP In taxable accounts did get them (and paid them), but there is no consensus on what is taxable in an IRA other than the 1K limit on operating earnings (Box 1 on the K1).
It may be paid by the custodian but its from your funds. And the 1K limit is across all your IRA accounts. Some custodians (Schwab) are quite diligent while Fidelity seems to ignore it
One of the reasons for going private was to save money + fees on the required reporting for publicly held securities. They'll still have to do that for PFX unless it goes away via a tender offer, etc
Didn't think it was callable but rather matured in 2032, but not totally sure about that. Of course they could always do a voluntary tender at par or a slight premium
Talked to Fido who blamed ETP. To make a long story short, Fido adjusted my reinvestment today to a price of 45.362 with more units.