Can I own units in my individual retirement account (IRA) or pension or profit sharing plan?
We strongly recommend that you consult a tax advisor regarding the tax ramifications of MLP ownership but, in general, you can own MLP units in an IRA, pension or profit sharing plan subject to the following caveat: Only the first $1,000 of net Unrelated Business Taxable Income, or UBTI, from all sources is excluded from taxation. In other words, to the extent that the IRA or plan has more than $1,000 in aggregate UBTI, the excess would be taxable even though the units are held in a tax-exempt account. There is a reporting obligation if gross UBTI exceeds $1,000. Virtually all of our income will be UBTI.
Related Questions
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- Can I own units in my individual retirement account (IRA) or pension or profit sharing plan?
