No. of Recommendations: 1
Question 1: If someone was to consider investing money in an MLP within an IRA, is there any way (a rule of thumb) to determine a maximum amount that could be invested that would keep the UBTI at or below $1000?

It's entirely a function of the MLP. For a lot of MLPs, you could own a billion dollars worth with no issues. For others, the threshhold is very much lower... in five digits.

Question 2: You said, “Anyway..... if it is throwing off positive UBTI, any amount over $1000 annually in a IRA (or other non-taxable account) is taxable anyway... for that year. The amount is paid by the account administrator (meaning your broker)... who then bills you for the tax... plus administrative fees.” So, if there was a positive UBTI of $2000, a tax would be paid by your broker (for which you would be billed) on $1000. Since the broker doesn’t know your tax bracket, I assume there is a fixed tax rate they would apply to the $1000. Do you have any idea what this tax rate would be?

I really don't know. I'd suggest taking that question to the Fool tax strategies board:

Question 3: You gave reference to an MLP discussion board on Yahoo. I have a portfolio set up on Yahoo, but from this website, I was unable to find this board. Would you please provide a link? Thank you.

My mistake. It turns out that the MLP board I referenced is at You have to join to participate. I thought that was no big deal.

Sorry 'bout that!

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