Tax filing for MLP UBTI < $1000 in Roth IRA

When someone has Master Limited Partnership (MLP) unrelated business taxable income (UBTI) income that is less than < $1000 in his/her Roth IRA for a particular year, it is known that he or she does not need to pay any taxes.

Questions:

1. In this case, does he/she still need to file the tax (for solely record purpose)?

2. If he/she later sells the MLP stocks and realizes some capital gains (not dividends), does these capital gains contribute to the annual $1000 UBTI limit?

Thanks!

posted

If the UBTI is less than $1,000 you do not need to file anything. If you sell the MLP stock with gain, it does not contribute the UBTI limit- the UBTI is within (internal) the MLP as a whole not as applied to your holdings.

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