UAN in a normal account = same as any other MLP.
UAN in a tax advantaged account, you pay 37% tax on UBIT above $1,000 per year.
Key points.
UBIT is not the same as distributions. Don't let the distribution affect your UBIT calculation.
Selling an MLP in a tax advantaged account accelerates UBIT (I think). You already sold, so too late).
The broker will calculate your IRA or Roth UBIT each year, and they will tell you that you have a tax obligation if you do. Just wait for them to tell you, and if you have it pay it. If you have it, in UAN's case I think you should have received significantly more than you owe. You do have to pay tax, which sucks in an IRA, but I believe it means you made a lot of money, so don't sweat it. If you didn't earn any UBIT, perhaps your investment stunk and you don't owe tax. That's much worse.
I think you owe zero on capital gains when you sell a MLP in an IRA, but you do cause the UBIT calculation to accelerate.
Best approach - don't trade the MLP, it is more likely to trigger taxes.
UAN in an IRA has made everyone invested so much money in the past year that worrying about taxes is the wrong approach. Most people with UAN here should have at least doubled their investment, so just let it sit if it's in a regular account, and let the broker tell you if you have a UBIT triggered tax obligation in your IRA. Don't sweat it.
PS - I'm unsure if any of that is correct, but that's my understanding. |
