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Strategies & Market Trends : Dividend investing for retirement
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To: chowder who wrote (5451)8/16/2010 8:17:57 PM
From: LTBH  Read Replies (1) of 34328
 
Whether there will be any UBTI and to what amount is so variable and unpredictable that I suggest its foolish to hold an MLP/LLC in an IRA.

Some actual current hard data.

I purchased a position in an LLC on 12/31/08 for $5.31. My 2009 K-1 shows $462.50 UBTI per 100 units, so a meager $1600 300 unit position would trigger an IRA tax filing as well as taxes due if this had been held in an IRA.

For windage, of twelve investors in the same LLC, there were 6 with UBTI's in excess of $200 per 100 units while another three had UBTI's of low to mid $100 per 100 units. The highest UBTI for this group of investors in the SAME LLC was $564.48 per 100 units.

Based on a data collection effort to identify UBTI tells, there doesn't appear to be any that are predictable except that PERHAPS the better (lower) your buy point then perhaps the larger both your exposure to UBTI and the amount of said UBTI.

If you do not wish to have the IRA pay taxes then suggest either ignoring this type investment or using GGN as a proxy.
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