UBTI

See the 10/29/12 thread called "Taxation of UBIT in IRA".

"Alan" wrote in message news:k7c5u6$h2n$ snipped-for-privacy@dont-email.me... On 11/6/2012 2:43 PM, Taemwar wrote: On the Motley Fool and Seeking Alpha and other forums I've seen postings which imply that UBTI and recaptured depreciation are synonymous. This has been in connection with owning MLPs in an IRA. The idea expressed is that if you hold your MLP for several years in an IRA, even if there is negative UBTI on line 20V every year, you will owe UBTI because the recaptured depreciation transforms into UBTI upon sale. ~~~~~~~~~~~~ Someone in Seeking Alpha who writes under the name of Reel Ken also argues that UBIT is created when you sell your MLP. He refers to Sec 1245 assets being subject to recaptured depreciation and seems to assume that when you sell an investment in an MLP, you are selling a Sec 1245 asset. The tax rules he cites relate to a sale of Sec 1245 assets by the MLP not an IRA owner of the MLP. This recapture could create UBTI but only in connection with the UBTI reported on Line 20V rather than a selparate, additional UBTI based on selling your shares of the MLP MLP.