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Subject:  Re: Gifting MLPs Date:  12/9/2012  3:25 AM
Author:  BruceCM Number:  56 of 111

I doubt the charity would want to take ownership of the MLP due to their non-profit status and the UBTI they may be responsible to pay when the units are sold, due to the recapture of the Sec. 1245 depreciation. But if they did, you'd have to find out from the MLP what the capital gain portion of the current appreciation is and, I would think, add that to your current adjusted basis to determine the actual gift amount. You will want to double check this, but I'm pretty sure this is how it would work.

As to gifts to a non-spouse....the basis and the holding period will transfer to the giftee. As in the case of all gifts of investments, make sure the fair value exceeds your adjusted basis. Gifting a loss is never a good idea, as the giftee would then have a dual basis and you would lose the ability to take the loss.

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