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I'm not a tax accountant, but as I understand it the distributions are, after amortization etc, (which makes a lot, even a the majority in many cases, of the distribution tax-free) considered the same as earnings - like your salary. BIP will send you a K-1 at the end of the year rather than a 1099. The IRS term is "unrelated business taxible income" or UBTI. Morningstar wrote an article that said "...any UBTI distribution that exceeds $1,500 (across all the IRA accounts you hold) is taxable at the account level." and "'ll pay income tax on distributions that exceed $1,500." Here's another introductory rundown:

In addition, the share basis is adjusted down annually by the amount of the distribution.

So I'm trying to keep my distributions below $1,500 and sort of see what the tax season brings before I decide if its worth it. I'd welcome any clarification or correction by those more familiar with the issues.

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