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Summary Unrelated Business Taxable Income (UBTI) is the income that can trigger Unrelated Business Income Tax (UBIT) for tax-exempt organizations and retirement accounts. Investors can own MLPs ...
MLPs pay their investors through quarterly required distributions, the amount of which is stated in the partnership agreement, or contract, between the limited partners (the investors) and the general partner (the managers). The distribution paid by MLPs is equivalent to the dividend paid by C corporations.
A section of the tax code imposes what's called the Unrelated Business Income Tax, or UBIT, on IRAs with MLP income exceeding $1,000 annually. Those who have worked with non-profit organizations ...
Here’s how a master limited partnership works, examples of MLPs and their pros and cons. Skip to main content. 24/7 Help. For premium support please call: 800-290-4726 more ways to reach us ...
Unrelated Business Income Tax (UBIT) in the U.S. Internal Revenue Code is the tax on unrelated business income, which comes from an activity engaged in by a tax-exempt 26 U.S.C. 501 organization that is not related to the tax-exempt purpose of that organization.
The test above works for general partners in a partnership, but not for limited partners. Limited partners, by the nature of having limited liability, do not have to pay back deficits. Instead, there is another test called the "alternative economic effects test" that follows the first two requirements, but replaces the last requirement.
Similar to direct MLP investment, return of capital distributions from an MLP fund structured as a corporation lower an investor’s basis, and taxes are not [...] Beyond the K-1: Tax Treatment ...
Typically, 70-100% of MLP distributions have been considered a tax-deferred return of capital, which means one does not pay taxes on that portion of the distribution until the investor sells his ...