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Thank you for your question, and thanks for using JustAnswer.com. As far as MLPs go, KMR is designed to be held in tax deferred accounts such as a Roth IRA
Their counterpart, KMP, is designed more to be held in a taxable account - which would be beneficial because the payouts from KMP can be classified as a return on capital. There's no benefit to holding this in an IRA.
But, KMR is designed with tax deferred accounts in mind. Many people hold this MLP in their IRA portfolio.
KMR does not generate UBTI, because their distributions are made for additional units, not cash so you are receiving more stock instead of a cash benefit
For this reason, there is no UBTI and it should be safe in your Roth IRA account.
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I knew this already. But apparently some investors may get hit. What do you need to know to find out if I personally will or won't get hit?
Thank you for your follow up. If you take your distributions in additional shares, you will not be hit by UBTI. From what I read, you will not be hit with UBTI with KMR, but you could be with KMP.
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