Year-End Planning-Not All Investments are the Same
Several of the following articles suggest the purchase, sale and transfer of investments. Not all investments are the same. Master Limited Partnerships (“MLP”) units are not equivalent to stock. If you sell or transfer stock, you are dealing with capital gain properties. The cost shown on your broker statements is usually your tax basis in the stock. The cost of the MLP units is not your tax basis. The distributions you have received and the income shown on the Schedule K-1s affect your basis.
When you sell stock, you have a capital gain or loss. When you sell MLP units, you will have ordinary income. The capital loss you thought you were triggering could be a gain. Charitable contributions of stock held for more than a year will generate a charitable contribution equal to the value of the stock. A gift of an MLP will not. The deduction will be limited to your basis.
Also, gain and losses within your retirement accounts will not affect taxes. The articles include ideas and thoughts for year-end planning. Before acting on the ideas, you should contact your tax adviser.