Solved

Treatment of MLP's upon death of owner

Forum|Forum|2 years ago
October 14, 2023
2 replies
0 views

No text available

Best answer by Anonymous_

There will be a step-up assuming this is a typical grantor trust (the assets are included in your estate).

In terms of recapture (depreciation), that essentially disappears since depreciable assets are stepped up to FMV on the date of death.

Internally, I will page @Mike9241 for input on MLPs.

A

Anonymous_

Employee

See https://ttlc.intuit.com/community/retirement/discussion/1-do-my-heirs-take-my-master-limited-partnerships-etp-held-in-regular-accounts-with-a-stepped-up/00/647182

F

fzalokar12Author

I understand the step up on DOD, but my MLP's are held in a Trust and on my death I want the Trustee to sell all my MLP's (approx $2.5 million). Now my questions:

1. My Trustee sells all MLP's the day after my death. Does the Trust have no gain or loss upon sale due to step-up?

2. I have held these Mlp's for years. Will the Trust have no recapture?

A

Anonymous_Answer

Employee

There will be a step-up assuming this is a typical grantor trust (the assets are included in your estate).

In terms of recapture (depreciation), that essentially disappears since depreciable assets are stepped up to FMV on the date of death.

Internally, I will page @Mike9241 for input on MLPs.

F

fzalokar12Author

Thanks for the response! This was also my understanding but wanted confirmation. My Trust is a grantor trust and the beneficiaries are not market knowledgeable so best to give them cash after the MLP sale.