Facts about MLPs

[dan_s]

Sent to me by one of our members:

Issues like MLPS issue K-1 tax documents that are not issued until
March and lately the first part of April when most clients have already
Filed their taxes. MLPs held in an IRA do not have separate
tax reporting except in the case of those will produces UBIT. This
makes MLPs easier to own in an IRA than in a taxable account where
you will wait, and wait, and wait for the K-1 to be delivered. Do
you deny that reality, Brother Dan?

On the other hand, MLPS held in taxable accounts are only tax-
deferred and will be taxed on sale. When even then, there is a
Tax-advantage because the investor has received income that will
be taxed as a capital gain. For some people, this is very useful
information. Upon death, the capital gains won’t be taxed at
all!

Investing grandmother’s money for income and rising income
potential in Enterprise Products Partners or Magellan Midstream
Partners or Kinder Morgan Partners may not be a bad idea con-
sidering all the income she receives will be effectively tax-free
upon death.

[adamlloyd]

I have owned quite a few MLPs over many years and have always received my K-1s by the end of March at the absolute latest, but generally early in the month. What sometimes is a nuisance is receiving revised 1099s after the mid April filing date. Consequently I never file early as having to prepare and submit a 1099-X is a pain.

Adam