From what I've read you cannot offset a positive ubti on one mlp k-1 with negative ones on another. When you add the ubti's up in an IRA, the negatives count as 0s. If the total of the positive ubti's is greater than 1000$ you have to have your broker pay ubti tax. MEMP fooled me until I read their detailed instructions (a real pain to do). The number they put in 20V1 which is supposed to be ubti, isn't. I noticed it was the same amount as in box 1. The instructions say to subtract from this number the amounts in 13J and 20T1 and some other box, I forget...so it looks like don't have ubti. I just hope my broker doesn't screw up and pay ubti without doing the adjustment.
My K-1 has a negative value in box 1 and positive values in both boxes 2 and 3!!! Also note, I bought and sold mmlp in 2013..so it was a short term holding. Turbotax only allows you enter 1 of the 3 boxes per k-1 entry...and say something about creating additional k-1s for the other two boxes. How do I do this? Do I need to allocate boxes 4 to 20 somehow to do this and if so, how in the world to do this as I see so instructions for this. What are you all doing regarding this for your k-1s?
In 2013 I sold the MEMP that was in my IRA. I just looked at my K1 which is now available at their website and notice that box 20V has a large positive number, well over $1000. It is my understanding that the IRS requires taxes be paid on UBTI (that is over $1000) in an IRA and that this has to be done by the brokerage that holds your account and that the payment is made via funds in your IRA. I also vaguely remember reading long ago that you should first subtract values (if there are any) that are in boxes 13J and 20T1. I notice that my MEMP K1 does have values for 13J and 20T1 and that if I subract them, the UBTI falls below $1000.
Does this mean that I don't have to worry about UBTI? Can someone knowledgeable in this area please confirm this for me? Thanks.
That made my decision for me. I had sold my WR and was going to replace it with TEG...but why bother, when I can get newly issued VZA which yields 5.8-6%. VZA is an exchange traded bond issued by AT&T. I figure it is pretty safe..and since teg is essentially a bond anyway...I'd go with vza because it is also better rated.