Am I creating a future accounting/tax return nightmare by keeping a Limited Partnership stock paying large dividends in my SEP IRA?:eek:

Is the stock a publicly-traded equity, or is privately-held?

It is a publicly traded stock... NuStar (NS)...

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.

I wonder if the LP will have any UBTI flowing up so that the IRA is subject to the unrelated business income tax.

On a publicly-traded stock?

Limited partnerships don't have stock. They have partnership interests.

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?

An IRA is a tax exempt entity.

Yes, the IRA for the stock owner IS an tax-exempt entity, but the limited partnership is NOT.

Yes, but the profits flowing up from the partnership may have some business income that may trigger UBTI to the IRA.

I really do not see how, but I will yield to your greater level of experience and expertise in these matters.

Quote:

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Originally Posted by IntlTax

Limited partnerships don't have stock. They have partnership interests.

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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)