David Dittman

David Dittman
Contributor since: 2011
Company: Investing Daily
I find your analysis of the UBTI situation highly informative and the same time very provocative. Thank you.
However, does not the IRS definition of UBTI (from 26 USC Section 512: "The term 'unrelated business taxable income' generally means the gross income derived from any unrelated trade or business regularly conducted by the exempt organization, less the deductions directly connected with carrying on the trade or business."), specifically the "less the deductions" clause, suggest no "recapture" upon disposition of MLP units held in an IRA?
In other words, aren't many of the "shields" "deductions directly connected with the carrying on the trade or business" that generates the UBTI for the IRA?
I agree with your conclusion that MLPs should be held in taxable accounts, and the complexity of the issue is only more evidence for the case.
Thank you again for this contribution to what remains a very unsettled topic--as much in law as for investing.