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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (35134)	8/15/2009 5:45:52 PM
From: Spekulatius	Respond to of 78752

re UBTI - Paul is correct. it may not be that big of a deal if the UBTI goes above 1000$. From what I know, your brokerage custodian has to fill out some paperwork (if they indeed notice that your UBTI is above 1000$) and they may charge you for that and you will have to pay taxes from you taxable income for this UBTI. This is certainly a hassle but may not be a big deal depending on your particular circumstances. The problem with most MLP CEF is the leverage. most of them violated leverage covenants during the Y2008 meltdown and had to deleverage at the bottom. This of course destroyed their performance. For this very reason, I prefer straight MLP holdings and keep an eye on the UBTI issue.