Coolius
Full time employment: Posting here.
- Joined
- May 15, 2010
- Messages
- 862
There are some MLP preferreds that pay "guaranteed income " and not affected by issues such as depletion, recapture, or UBTI. Examples are PAGP, LGCYP and others. The income is reported on K-1, but in a taxable income is considered an interest payment and taxed accordingly
As MLPs enjoy tax deferred and other benefits, the "conventional wisdom" is to keep these in a taxable account. Hence MLP preferreds who do not have the same benefits are usually in a tax-deferred account.
If MLPs are kept in a tax deferred account and UBTI exceeds $1,000, there will be tax due. Best to Google for this subject if you think you might be affected. It is very complex.
As MLPs enjoy tax deferred and other benefits, the "conventional wisdom" is to keep these in a taxable account. Hence MLP preferreds who do not have the same benefits are usually in a tax-deferred account.
If MLPs are kept in a tax deferred account and UBTI exceeds $1,000, there will be tax due. Best to Google for this subject if you think you might be affected. It is very complex.