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Category: Finance
Satisfied Customers: 4474
Experience:  Tax professional and business consultant for 35 years.
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Sir, I appreciate you explaining the tax implications of

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I appreciate you explaining the tax implications of having MLP/RETIS in my retirement vehicles. So for tax deferred vehicles like a standard IRA, the dividend payouts are considered UBTI correct? And each individual only gets a $1000 cap before they pay penalties?

How about a ROTH IRA? Are the dividends from these stocks/ETF's subject to UBTI rules like traditional tax-deferred retirement vehicles? Thank you.

PDtax :

Hi from Just Answer. Thanks for asking for me.

PDtax :

Payouts from MLP are often part income, part return of basis. Only the income portion could get UBTI treatment, and then only if the total UBTI was $1,000 or more.

PDtax :

REIT income is normally a higher portion of income, and little to no return of capital, and there are more opportunities to receive UBTI from a REIT. The same test holds for taxability.

PDtax :

These same rules apply to a Roth IRA, and yes, it can have taxable income from UBTI.

PDtax :

Thanks again for asking for me, and thanks from Just Answer.

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