Hi and welcome to our site!Income in the form of interest and dividends from a Master Limited Partnership that is owned by the IRA and transferred to the IRA account is not taxable.While funds are in the IRA - any earnings is deferred from tax liability until funds are distributed. When distributed - income is recognized for income tax purposes. But as long as the money are within the IRA - the tax liability is deferred.
I hope his answer is correct because I received a letter from IRS saying we ow taxes on interest and dividends on a number of MLPs all held in an IRA. I plan to send a copy of this reply to IRS and see if they agree. I think they better start training their reps better and quit partying so much.