If your IRA earns more than $1000 in a year in UBTI (Unrelated Business Taxable Income); the IRA custodian will need to complete and file a Form 990-T and pay the "excise tax" due. That tax money is removed from your IRA. In addition to the taxes owed; starting for the 2018 tax filing year, Fidelity charges a $300 fee for completing the 990-T and paying the tax/penalties for you. I don't know if other brokerages charge similar fees.
The details for this policy can be found at: https://www.fidelity.com/tax-information/tax-topics/ubti
Most MLP's will not generate more than $1000 of UBTI per year. Only 2 of my 9 MLP holdings show a positive UBTI value on the K-1 box 20-V. The 2 that had a positive UBTI have been owned for at least 10 years.
Paying that $300 fee to Fidelity and still owing the tax would definitely eat into any advantage of holding the MLP which generates UBTI greater than $1000/yr in an IRA.
