| To: Elroy who wrote (798) | 12/22/2023 12:26:56 AM | | From: Area51 | | | | Hopefully that will work (transfer shares out). That might work for an IRA account as well, right? I guess we'll find out in 2025 for Roth anyway.
Just posting this for future reference on UBTI UDFI
iamlookingforincome.blogspot.com
One thing of interest is
Partnership Debt Ratio (Provided by Partnership separately)
seems to me that my form 990-T didn't reduce the capital gain by this factor. Not sure if this is because UAN debt ratio is 1.0, or if they just conservatively assumed that it is 1.0 because the partnership doesn't provide a value. |
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| To: Area51 who wrote (799) | 12/22/2023 10:42:53 AM | | From: Elroy | | | | If you remind me post Dec 28 I'll look into what my 990T said last year, I've got family here and no time to go through papers.
Anything that reduces tax payments is fine with me! |
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| To: Elroy who wrote (800) | 2/2/2024 11:39:24 PM | | From: Area51 | | | | I would still be interested if you can glean a debt-ratio from any UAN 990-T. Also if anyone has a different mlp 990-t and the debt ratio is utilized in the 990-T I would be interested. I kind of think that some partnerships will include the debt ratio in the K-1 and in those cases the capital gain that is taxed on the 990-T will be reduced accordingly. UAN didn't include a debt ratio in the K-1 so the people doing the 990-T default to conservatively (as far as maximizing the tax due) using a debt-ratio of 1.0?
Regarding transferring shares to a taxable account to avoid the capital gains tax:
The link below considers the transfer of shares out of an IRA (see Q51 and Q53) to a taxable account. Seems like an in-kind distribution to me? If so maybe the transfer is not treated as an effective sale of the IRA shares so the capital-gain might escape the UBTI tax?
Q53: What happens if an in-kind distribution of the UBTI generating investment is taken? A53: IRA owners should determine with their external tax advisors whether the investment can and should be distributed from the IRA. The tax liability up until the date of distribution from the IRA will still need to be paid.
faq-ubti.pdf |
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| To: Elroy who wrote (802) | 2/5/2024 1:05:59 PM | | From: Area51 | | | | Right I couldn't find where that partnership debt ratio would be entered on the 990-T, so if anyone has a 990-T that credited the partnership debt ratio maybe they could let us know.
On the transfer thing: <<The UAN MLP says if the broker tells them the withdrawal is a transfer, it won't produce UBTI as a result of the transfer>> That seems kind of odd to me:| if they just lift the units from the IRA and put them in the taxable account with the original purchase date, it seems to me that that could effect your taxable income for previous years. I think you should transfer out 10 shares this year and see what really happens.
Best Regards, A51 |
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| To: Area51 who wrote (803) | 2/5/2024 1:28:17 PM | | From: Elroy | | | | if they just lift the units from the IRA and put them in the taxable account with the original purchase date.....
I think they lift them out of the Roth IRA, and put them in the taxable account with the transfer date (and transfer date unit price as the cost basis).
That's how regular equities are done when transferred out of a retirement account. They say MLPs will be done using the same method. It seems odd, but what's the alternative? |
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| To: Elroy who wrote (804) | 2/5/2024 3:00:54 PM | | From: Area51 | | | | | Actually that seems like a reasonable approach. I hope that is what they would actually do (and no capital gains tax on the position transferred out). I'd vote for it for sure. |
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| To: RJCogburn64 who wrote (807) | 2/22/2024 7:34:42 AM | | From: Elroy | | | | Yes, the results are a real dud.
I've sold most of my UAN last summer, and plan to sell the remaining bit fairly soon. |
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