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Financial Planning / Tax Strategies


Subject:  Master Limited Partnerships Date:  8/26/2012  12:07 AM
Author:  culcha Number:  116551 of 130451

I'm doing some reading about MLPs, and I have a couple of tax-related questions. First, is it true that the sale of an MLP will trigger a lot of recapturing (and therefore taxes), especially if the MLP has been held for a long time? Is this equally so whether the MLP has been held in an investment vehicle such as a TIRA or a Roth or a taxable account?

I see different people recommending different things about putting MLPs in an IRA of any kind; some say that's a good place for them; some say not. Is one of these views the right one -- or could different investors do well either way?

And, if there is this problem about recapturing, suppose I just keep the MLP until I die, using it for income in retirement, and then let it pass to my heirs. Would they get a step-up in basis and be able to turn around and sell it immediately, thus avoiding any recapturing (and tax) problems? If this is my plan, would that help to pinpoint what kind of account would be best (TIRA, Roth or taxable)?


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