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View Full Version : Limited Partnership stock inside an IRA


setexenv
Oct 29, 2009, 12:56 PM
Am I creating a future accounting/tax return nightmare by keeping a Limited Partnership stock paying large dividends in my SEP IRA?:eek:

AtlantaTaxExpert
Oct 30, 2009, 12:52 PM
Is the stock a publicly-traded equity, or is privately-held?

setexenv
Oct 31, 2009, 04:21 PM
It is a publicly traded stock... NuStar (NS)...

AtlantaTaxExpert
Nov 2, 2009, 03:21 PM
If it is publicly traded, then buying it as an equity in your SEP IRA portfolio perfectly legal with no "accounting nightmare" that are any worse than buying a mutual fund. The dividends will accrue in your IRA tax-deferred, and any increase in the stock will also be tax deferred.

The only real disadvantage is the fact that the stock, when sold at a profit, will NOT be eligible for favorable capital gains treatment. The profit will be taxed as ordinary income when distributed from the IRS.

IntlTax
Nov 9, 2009, 07:30 PM
I wonder if the LP will have any UBTI flowing up so that the IRA is subject to the unrelated business income tax.

AtlantaTaxExpert
Nov 10, 2009, 10:41 AM
On a publicly-traded stock?

IntlTax
Nov 10, 2009, 10:42 AM
Limited partnerships don't have stock. They have partnership interests.

AtlantaTaxExpert
Nov 10, 2009, 11:31 AM
Granted, but they are publicly traded, and it would seem that this is exclusively a for-profit limited partnership.

Is not UBTI an issue only in tax-exempt organizations, such as charitable remainder trusts or non-profit organizations like a 501c?

IntlTax
Nov 10, 2009, 11:45 AM
An IRA is a tax exempt entity.

AtlantaTaxExpert
Nov 12, 2009, 09:12 AM
Yes, the IRA for the stock owner IS an tax-exempt entity, but the limited partnership is NOT.

IntlTax
Nov 12, 2009, 04:35 PM
Yes, but the profits flowing up from the partnership may have some business income that may trigger UBTI to the IRA.

AtlantaTaxExpert
Nov 13, 2009, 02:05 PM
I really do not see how, but I will yield to your greater level of experience and expertise in these matters.

Foil
Jul 17, 2012, 12:51 PM
Limited partnerships don't have stock. They have partnership interests.

So... are the dividends received form the "partnership interests" shares treated the same way at tax time as the dividends from a company stock? (eg. OKE & OKS)