"basically the Roth IRA sold the investment for FMV on the date of distribution, which, since it is tax exempt, produces no tax consequence for it "
Not correct. A portion of the gain on the sale of an MLP inside of a Roth may be classified as UBTI, and any UBTI above $1,000 inside a Roth is taxed at 37%.
Whether or not an in kind transfer from a Roth to a regular account (both with the same owner) is considered a sale by the Roth, or not, is the key question.
