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Msg  123426 of 124558  at  10/1/2020 8:53:05 AM  by

jrad51


 In response to msg 123415 by  upn42
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Re: UBTI losses on sale of all units of a particular holding

I assume you're talking about a 2019 tax issue.  If you're concerned about 2020, the same discussion should apply.  
 
The fact that you sold ET in 2017 might be the key here.  
 
I am not an expert on UBTI but I know a bit about it.
 
1. IRAs are generally trusts, not corporations.  So the IRA UBTI rules are a combination of trust taxation and UBTI rules.  For example, the passive loss rules are entirely different for corporations than they are for trusts.
 
2. Yes, when you sold ET in 2017 and net UBTI loss (I assume your loss carryover less the ordinary gain on sale) becomes non-passive and can be used against any type of income.  If it can't be used in 2017, it carries forward as an NOL (net operating loss) and not a passive loss carryover.  NOL carryovers can be used against any type of income in future years.
 
3. In 2017 the law changed for UBTI, including NOLs.  The 2017 law enacted a new silo-ing rule that says exempt organizations must compute UBTI separately for each of their trades or businesses and can't offset losses from one silo against gains from another silo, if that makes sense.  Like most UBTI rules, this wasn't aimed at IRAs; it was part of a plan to tax colleges and other exempt orgs, but IRAs fall under these rules as well. That would make you wonder if you could use an "ET loss" against an "EPD gain", for example.
 
4. I THINK (I haven't had any reason to keep track of this) that when the IRS proposed regs on the silo rules, they said you could elect to treat all publicly-traded partnerships as 1 trade or business.  So maybe the silo rules don't apply.  Because of my next long-winded point I don't think any of this matters; I'm just going thru the steps.
 
5. The 2017 law change only applies to NOLs incurred post-2017.  Pre-2018 NOLs continue to get the benefit of the pre-2018 law and can be used against any UBTI earned by the exempt organization, no matter which silo it's in.
 
So I think you should be able to use the unused 2017 NOL against other MLP UBTI in 2018 and subsequent years. 
 
But remember there's a lot of computations involved to make sure you didn't need to use the NOL in 2018 or 2019, for example.  
 
Hope this helps. 


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Msg # Subject Author Recs Date Posted
123427 Re: UBTI losses on sale of all units of a particular holding rlp2451 1 10/1/2020 9:13:02 AM






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