For aj485 re sale of MLP's

Financial Planning Tax Strategies
1

Hi aj!

We talked a lot about MLP UBTI taxation in this thread 4 years ago (thanks so much for your insight), and now I have a related question:

https://discussion.fool.com/very-disturbing-thread-for-mlp-holde…

Many MLP’s result in loss carry forwards that accumulate over time…some quite large. Can these losses be used to offset gains from the sale of an MLP? If so, would that apply to MLP’s held in both taxable and non-taxable (traditional IRA) accounts.

Thanks for any light you can shed!

Cheers!
Murph
BL Home Fool
(who has some MLP’s he has held so long the cost basis is zero/negative)

2

Many MLP’s result in loss carry forwards that accumulate over time…some quite large. Can these losses be used to offset gains from the sale of an MLP? If so, would that apply to MLP’s held in both taxable and non-taxable (traditional IRA) accounts.

As with all MLP taxes, the answer is complicated. Yes, NOL carryforwards are allowed to offset gains on sale, but returns must have been filed documenting the losses to use them to offset gains. So, for your IRA, your administrator would have had to file the 990-T documenting the losses each year.

AJ

1 Like
3

Thanks very much, AJ!

Cheers!
Murph