Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Paul Senior who wrote (69886)	3/3/2022 2:53:40 PM
From: E_K_S	Read Replies (1) \| Respond to of 78822

Re: UAN Same thoughts here but in the taxable account. I think my cost basis (according to the K1) is at/near zero. If the future distributions are going to be as large as everyone says they will, I may just hold and book the distributions. Not sure you can have a negative cost basis. Will have to look at the K1 in more detail. I did peel off a few shares in 2022 around $89/share so will have a better idea in the 2023 tax year.

To: Paul Senior who wrote (69886)	3/3/2022 3:10:51 PM
From: Elroy	Read Replies (1) \| Respond to of 78822

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.