UAN. I added a few units today to the few I have.
I really don't like mlp's though, and this one has been troublesome for me at tax time. I am now keeping my units in tax-deferred accounts, but this is considered very undesirable for this type investment (mlp). That is somewhat or primarily due to the possibility of UBTI. (And maybe if/when cost basis drops below 0, and then cap gains must be paid (taken out of the tax-deferred account)?)
Couple of years back when I held UAN in taxable account, the company reported good distributions, but also good income (where distribution amount available -depreciation= income). This unusual for an mlp (esp. oil mlps) where depreciation expense is so much larger than amount avail for distribution, that income becomes negative or 0. Just restating what we all know about mlps.
Anyway, UAN thus reported income which I had to report in Fed return. And had to be reported in every state where UAN had operations (3 + my home state). And I made some sales, which seemed to confuse turbotax (and me). I don't want to go through this again for my small position size. Ok for you guys who have maybe several thousands of units or a paid tax preparer familiar with mlps.
Elroy, I remember grimacing when you were posting about your conversations with the k-1 people to try to get some clarification about issues you had with UAN, I believe.
Otoh, maybe my having little depreciation in that particular year or years has been changed with the modifications UAN has made to its operations (i.e. has now a lot of depreciation offset). Also, if a person just had the intent of holding the units in perpetuity and letting heirs decide, that'd be a reason to be with taxable account. That's not me though -- I like the idea of being able to sell when I want and not have the worry how am I going to settle all this at tax time.
Anyway I've a few units in several tax-deferred accounts, sub-optimal as that may be. |
