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Energy Transfer LP

Energy Transfer LP (ET)

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nwtf nwtf 2 weeks ago
Schwab sent this--
UBTI and Form 990-T: FAQs
What is UBTI?
Unrelated Business Taxable Income (UBTI) is income from a trade or business regularly generated by an exempt
organization that is not substantially related to the organization’s exempt purpose. The tax-exempt purpose of an IRA
is to provide income for retirement. Investment income earned by an IRA is tax deferred for a traditional IRA, and tax
exempt for a Roth if it’s a qualified distribution. However, if the IRA invests in a publicly traded partnership (PTP),
master limited partnership (MLP), limited partnership (LP), private equity partnerships (PEP), hedge fund partnerships,
or limited liability companies (LLC), it becomes a partner in an active business. If the partnership passes on profits
from its business, or investment income secured by debt, such income earned by the IRA may be treated as UBTI and
may be subject to tax.
What is UDFI? What is an example of UDFI?
Another way an MLP can generate UBTI is if it borrows money to purchase income-producing assets in support of its
primary business. This income, referred to as Unrelated Debt-Financed Income (UDFI), represents a subset of UBTI.
UDFI occurs when a partnership in which an IRA has an ownership interest borrows money (also known as using
leverage or debt financing). The net profits attributable to the leveraged portion are considered UDFI and are subject
to tax.
Example one: A real estate property is purchased with 75% IRA funds and 25% borrowed money. The borrowed
money is considered “unrelated” to the IRA because it is not taken from the IRA funds. A quarter of the total profit
earned is subject to UDFI tax.
Example two: An IRA invests in an MLP. That MLP then purchases $100,000 of common stock that pays $10,000 in
dividends. Of the $100,000 investment, $50,000 was borrowed by the MLP.
• Because portfolio income passed through an MLP is excluded from UBTI, the dividends distributed by the
MLP (the $10,000) are non-taxable to the IRA.
• However, since the MLP borrowed 50% of the common-stock investment, 50% of the dividends the MLP
distributes represent UDFI and will be taxed as UBTI.
When did UBTI requirements go into effect?
UBTI rules were created by Congress in 1950 and started applying to IRAs upon their creation in 1975. In tax year
1997, the IRS determined that firms like Schwab (custodians of IRA accounts) are required to prepare and file Form
990-T if the gross income of an IRA meets the $1,000 threshold. Custodians must then remit any tax due. In its
capacity as custodian, Schwab relied on clients to collect and send Schedule K-1 forms to Schwab.
What Is Form 990-T?
Form 990-T is used to report UBTI income generated in a tax-deferred account. An exempt organization that has
$1,000 or more of gross income from an unrelated business must file Form 990-T. Schwab examines your Schedule
K-1s to determine whether a Form 990-T is required, and files it for you if needed.
What is Schedule K-1?
Schedule K-1 (IRS Form 1065) is a tax document issued for a partnership’s investors, reporting each partner’s share
of the partnership’s earnings, losses, deductions, and credits. It also reports the UBTI earned in a tax-exempt account.
This document is used to prepare and produce Form 990-T.
Most partnerships use a vendor to create Schedule K-1, and the vendors share that data with Schwab. In some
instances, such as when partnerships do not use the vendors or the investments are classified as alternative
investments, the account holder must forward the Schedule K-1 to Schwab.
Where can I find UBTI and associated information?
UBTI and related information is provided to Schwab by the partnerships. Schwab does not generate or calculate
taxable information on the Schedule K-1. If there is a discrepancy on your Schedule K-1, contact the partnership
You can also find information related to UBTI on several IRS forms and schedules:
• UBTI: Line 20, code V of Schedule K-1*
• Ordinary gains: Sales Schedule (attached to Schedule K-1)
• Capital gains due to debt-financed activities: Sales Schedule and Form 8949 (included in Form 990-T)
*Note: Although most Schedule K-1s list the total UBTI on line 20 code V, additional UBTI may also be listed on the
entity’s statements or tax schedules, or in the footnotes of these documents.
This is an IRA. Why do I have to pay taxes?
Certain regulations dictate the circumstances under which taxes may be owed and/or forms must be filed.
• Section 511 of the Internal Revenue Code (IRC) states that even though an entity is recognized as tax-
exempt, it still may be subject to a UBTI tax.
• Section 408(e)(1) makes these provisions applicable to IRAs.
• Treasury Regulation 1.6012-3(a)(5) stipulates that fiduciaries of all IRA types that have $1,000 or more of
unrelated trade or business gross income must file Form 990-T.
Which account types are in scope for Form 990-T filing?
According to IRS Publication 598, the following account types are subject to tax on UBTI:
• Individual retirement arrangements (IRAs), including traditional IRAs, Roth IRAs, Simplified Employee
Pensions (SEP-IRAs), and Savings Incentive Match Plans for Employees (SIMPLE IRAs).
• Keogh accounts (retirement plans for self-employed) and i401K accounts.
• Coverdell Educational Savings Accounts (ESAs) described in IRC Section 530.
What is the deadline to file Form 990-T? Are extensions possible?
The deadline for brokers to file Form 990-T is April 15, or October 15 with an extension.
• Schwab will request an IRS extension of time to file for all IRAs that have a high probability of requiring a
Form 990-T.
• An extension will not avoid penalties and interest that may be included in your calculations due to non-
payment of any tax due in full by the due date of the return. To avoid any additional penalties and interest
calculations, estimated payments would be required. The deadline to pay estimated taxes is April 15.
Are personal tax filing extensions attached to 990-T filing extensions?
No. The filing of Form 990-T is separate from the client’s personal tax filing. The extension filed is ONLY applicable to
the 990-T filing.
Can I get a copy of the extension filed on my behalf?
Schwab will not be sending copies of extensions filed to clients.
Who generates my Schedule K-1s? How can I view them?
For alternative investments (AIs), Schedule K-1 should be provided by the partnership directly to you. For publicly
traded partnerships (PTPs), you can generally find this information on the partnership’s website or from their form
vendor. Two commonly used form vendors are:
• Tax Package Support:
• Partner Data Link:
To view your form(s), you’ll need to register and log in. You’ll need to provide your name, tax identification number,
and your current share quantity.
Schwab is not responsible for the content of these websites.
Is there anything I need to do?
If you hold a publicly traded partnership whose Schedule K-1 is generated by Tax Package Support or Partner Data
Link, you don’t need to submit anything to Schwab. Schwab will determine whether a Form 990-T filing is needed.
If you hold an alternative investment or a partnership that doesn’t use Tax Package Support or Partner Data Link to
produce their Schedule K-1s, the alternative investment or partnership will send the Schedule K-1 to you and you’ll
need to send a copy, including any supplemental pages, to Schwab to be analyzed and included for potential Form
990-T filing.
If tax is due, please ensure you have funds available in the account that holds the assets that generated UBTI, so that
Schwab may make the payment on your behalf. If sufficient funds are not available in your account, Schwab will file
your Form 990-T without payment, and your account may be subject to penalties and interest from the IRS.
Where do I send the Schedule K-1 that I received?
If you have received a Schedule K-1 for an alternative investment held in your tax-deferred account, Schwab will need
a copy as soon as possible for analysis for a Form 990-T filing.
You may upload tax documents securely via Message Center or send them by mail:
Regular mail
Charles Schwab & Co., Inc.
Client Tax Reporting
P.O. Pox 982006
El Paso, TX 79998-2606
Overnight mail
Charles Schwab & Co., Inc.
Client Tax Reporting
1945 Northwestern Drive
El Paso, TX 79912-1108
Will I have to do this again next year? Can I avoid having to file Form 990-Ts?
If you’ve invested in an MLP or an LP, filing a Form 990-T may be necessary. The likelihood that a Form 990-T will be
required is increased when partnership shares are sold and when the partnership is affected by a corporate action or
bankruptcy event. IRAs that do not hold MLPs, LPs, or other flow-through entities generally do not have a Form 990-T
Can I prepare the Form 990-T instead of having Schwab do it?
No. As custodian of your IRA, Schwab is required to file Form 990-T when tax is due and must remit payment from
your account that held the asset(s) that generated UBTI. Schwab’s name and address are used on the filing as well as
the payment.
Ex: Schwab Custodian Inc. FBO [Your Name]. Schwab remits payment on behalf of your IRA to the IRS through the
Electronic Federal Tax Payment System (EFTPS).
Tax Return Filing
Do I file Form 990-T or does Schwab?
Schwab will file Form 990-T on your behalf. In addition, we will send a copy to you for your records. If you see a
discrepancy, please contact us for further review.
Will Schwab file a Form 990-T to report UBTI losses?
Schwab will no longer file Form 990-T for losses; however, we will track losses to offset future gains.
Is Form 990-T filed under my Social Security number?
No. The IRA, not the IRA owner, owes the tax. Form 990-T will be filed under an Employer Identification Number (EIN)
belonging to the IRA. The IRA is a separate taxpayer from the IRA owner.
wshaw14 wshaw14 3 weeks ago
This one is acting like a yo-yo right now.
wshaw14 wshaw14 1 month ago
wshaw14 wshaw14 2 months ago
wshaw14 wshaw14 3 months ago
"About Form 990-T, Exempt Organization Business Income Tax Return (and ...

Form 990-T is a tax form used by exempt organizations to report certain income and tax liability1. Exempt organizations are those that are not subject to federal income tax, such as charities, religious groups, or educational institutions. Form 990-T is required if the exempt organization has income from a trade or business that is not related to its exempt purpose, such as rental income, advertising income, or investment income1. Form 990-T is also used by holders of self-directed IRA or HSA accounts to report their retirement account assets2."
Prudent Capitalist Prudent Capitalist 3 months ago
You tell me and we will both know. the advisor on the accounts where I hold large positions in ET indicates it is due to some rules change a number of years ago. but my ET holdings have never required the issuance or filing of that form. I do not believe it applies to "dividends" but rather other items inthe K-1 and most often only upon a profitable sale, etc. And, remember that ET does not technically issue dividends, but rather capital distributions.
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wshaw14 wshaw14 3 months ago
990T? 990-T, Exempt Organization Business Income Tax Return (and proxy tax under section 6033(e)) Why would this be applicable to ET Dividends?
nwtf nwtf 3 months ago
Schwabe is doing this at the behest of the govt for some reason. My financial advisor went round and round with them over it to no avail.
The kicker was that ET sent out the forms late---after I had already files my taxes and wasnt notified until around 3 months ago so I had to pay interest and penalties.
Prudent Capitalist Prudent Capitalist 3 months ago
nwtf: I hold substantial positions in ET in 2 different tax-deferred retirement accounts, and I frequently get that form letter which states that my account and K-1 (Form 1065) may be examined for a possible need to issue me a 990-T, and I have heard of some very rare situations when a 990-T was issued within a tax-deferred IRA, but I always receive the follow-up letter saying that there was nothing in my situation which warranted issuance of the 990-T.
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SilverKnightLV SilverKnightLV 3 months ago
I meant Letter of Intent, to be clear. Not memorandum
shajandr shajandr 3 months ago
Exactly so! 10/10
wshaw14 wshaw14 3 months ago
What I think you mean is that it means nothing definitive. Of course it means "something" or at least a good possibility of "something". These are both serious companies. Not pinkies that announce agreements to drum up share sales.
Prudent Capitalist Prudent Capitalist 3 months ago
True, but still appears to be a very promising transaction for our gem of an investment here.
SilverKnightLV SilverKnightLV 3 months ago
"Non-binding" and "letters of memorandum" mean absolutely nothing. The only thing that means anything is a contract.
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wshaw14 wshaw14 3 months ago
Energy Transfer inks non-binding deal to supply crude to France's TotalEnergies
nwtf nwtf 4 months ago
Its had to do with other business expenses and gains for the sale of Business Property. What that is I dont know. My financial advisor ran in to it with another client on a different issue but it Schwab
was the broker on it also. Plus you cant get around it as this all govt activated, Form 990-T Exempt organization Business income tax.
So because this happened in 2022 with out my knowledge and with ET filing these late I got hit with penalties and interest.

So question-----anyone else here get nailed with this for 2022?
wshaw14 wshaw14 4 months ago
That is weird. I have only had that happen on a sale with a large Capital gain. Are you sure you understood correctly what they said? I would call back and speak to a supervisor. I hold some in an IRA and some in a non IRA and have never heard of such a thing other than the situation I explained before about the very large gain.
Prudent Capitalist Prudent Capitalist 4 months ago
I only hold LP's and MLP's in tax deferred retirement accounts.
nwtf nwtf 4 months ago
Thats all well and good but I just got notified that there is a tax hit for being a shareholder because this is a limited partnership. They are going to take 2k out of my account and send it to the IRS. Ive owned this issue for a long time and this is the first time this has happened.
Prudent Capitalist Prudent Capitalist 4 months ago
Great news! And, I believe this will be an all-time high distribution for us, slightly higher than the current 8.84% distribution. ET has been a great investment for many, including those of us that took all of our distributions during the recent down years in automatically reinvested new shares.
wshaw14 wshaw14 4 months ago
Energy Transfer Announces Increase in Quarterly Cash Distribution
NorthPeak22 NorthPeak22 5 months ago
To read SA articles for free, copy/paste the web address for the article here....
NorthPeak22 NorthPeak22 5 months ago
NorthPeak22 NorthPeak22 5 months ago
I am starting to become somewhat obsessed with reading about Energy Transfer and their massive success as a business and as an investment.
NorthPeak22 NorthPeak22 5 months ago
wshaw14 wshaw14 5 months ago
Energy Transfer LP (ET) Becoming More Attractive for Investors
Prudent Capitalist Prudent Capitalist 5 months ago
Yep! Holding $14 and lots more upside here, all while we continue to reap the benefits of the 8.9% distribution.
weedtrader420 weedtrader420 6 months ago
wshaw14 wshaw14 6 months ago
Energy Transfer: Despite Big Risks, Tempting +9.0% Yield
wshaw14 wshaw14 6 months ago
Billionaire Kelcy Warren puts down a $40 million bet on Energy Transfer
wshaw14 wshaw14 6 months ago
Energy Transfer to Acquire Crestwood Equity Partners for $7.1 Billion
wshaw14 wshaw14 7 months ago
Not a great Quarter, but they cant all be great. If the share price drops enough I will accumulate some more shares. Enough for me is a few more cents.
wshaw14 wshaw14 7 months ago
Energy Transfer Reports Second Quarter 2023 Results
Business Wire
Wed, Aug 2, 2023, 4:10 PM EDT10 min read
In this article:

DALLAS, August 02, 2023--(BUSINESS WIRE)--Energy Transfer LP (NYSE:ET) ("Energy Transfer" or the "Partnership") today reported financial results for the quarter ended June 30, 2023.

Energy Transfer reported net income attributable to partners for the three months ended June 30, 2023 of $911 million. For the three months ended June 30, 2023, net income per common unit (basic) was $0.25 per unit.

Adjusted EBITDA for the three months ended June 30, 2023 was $3.12 billion compared to $3.23 billion for the three months ended June 30, 2022.

Distributable Cash Flow attributable to partners, as adjusted, for the three months ended June 30, 2023 was $1.55 billion compared to $1.88 billion for the three months ended June 30, 2022.

Growth capital expenditures in the second quarter of 2023 were $387 million while maintenance capital expenditures were $216 million.

Operational Highlights

During the second quarter of 2023, Energy Transfer’s assets continued to reach new milestones, with volumes increasing across most segments compared to the same period last year.

NGL fractionation volumes were up 5%, setting a new Partnership record.

NGL transportation volumes were up 13%, setting a new Partnership record.

Midstream gathered volumes increased 8%, setting a new Partnership record.

Intrastate natural gas transportation volumes were up 3%, setting a new Partnership record.

Interstate natural gas transportation volumes were up 17%.

Crude transportation and terminal volumes were up 23% and 15%, respectively.

Total NGL exports out of both the Nederland and Marcus Hook Terminals reached another record in the second quarter.

In June 2023, the 200 MMcf/d Bear cryogenic processing plant, which is located in the Delaware Basin, was placed into service.

Strategic Highlights

In May 2023, the Partnership completed the acquisition of Lotus Midstream Operations, LLC, and integration of operations is ongoing.

In July 2023, Lake Charles LNG entered into three non-binding Heads of Agreements ("HOAs") related to long-term LNG offtake for an aggregate of 3.6 million tonnes per annum.

Financial Highlights

Energy Transfer expects its full-year 2023 Adjusted EBITDA to range between $13.1 billion and $13.4 billion, which is slightly tighter than the previous range ($13.05 billion to $13.45 billion) while keeping the midpoint the same.

In July 2023, Energy Transfer announced a quarterly cash distribution of $0.31 per common unit ($1.24 annualized) for the quarter ended June 30, 2023.

As of June 30, 2023, the Partnership’s revolving credit facility had an aggregate $2.36 billion of available borrowing capacity.

For the three months ended June 30, 2023, the Partnership invested approximately $387 million on growth capital expenditures.

Energy Transfer benefits from a portfolio of assets with exceptional product and geographic diversity. The Partnership’s multiple segments generate high-quality, balanced earnings with no single segment contributing more than 30% of the Partnership’s consolidated Adjusted EBITDA for the three months ended June 30, 2023. The vast majority of the Partnership’s segment margins are fee-based and therefore have limited commodity price sensitivity.
Prudent Capitalist Prudent Capitalist 7 months ago
Yes, ET is very undervalued, but we are sitting a lot better than we have been since COVID hit. And, I sure have benefited from the automatic reinvestment of all dividends/distributions here when the shares were down in the mid-single digits for so long after energy shares first tanked.
wshaw14 wshaw14 7 months ago
I would not put a lot of faith in that $20 forecast, but I agree it is currently under valued.
Prudent Capitalist Prudent Capitalist 8 months ago
9.65% Dividend/Distribution. ET is still very undervalued here.
ET $20 price forecast. 9% dividend. Managed for growth.
Czerw Czerw 8 months ago
ET $20 price forecast. 9% dividend. Managed for growth. I’m in. Great stock to write puts on.
wshaw14 wshaw14 9 months ago
I found the following interesting. "If You’re Not Bullish On Energy Transfer LP (NYSE: ET) Now, You’ll Kick Yourself Later"
wshaw14 wshaw14 10 months ago
Energy Transfer's Recent $1.45 Billion Deal Won't Be its Last
Prudent Capitalist Prudent Capitalist 10 months ago
Yes. Very positive quarterly report from ET
wshaw14 wshaw14 10 months ago
Energy Transfer Reports Strong First Quarter 2023 Results and Updates 2023 Outlook
wshaw14 wshaw14 10 months ago
Energy Transfer Announces Increase in Quarterly Cash Distribution
wshaw14 wshaw14 10 months ago
Most tax software can import the figures directly from major brokers and insert them into your tax return. I have been doing it for a few years.
Prudent Capitalist Prudent Capitalist 11 months ago
No reason to worry whatsoever. Great long-term hold, but just be mindful of the fact that, if you hold this outside of a tax-deferred retirement account the tax filing can get a bit complex as it is still a LP. You timed it perfectly after the big drop right after COVID hit.
Muddy2 Muddy2 11 months ago
Buddy in o/g biz recommended ET late 2020. First couple of buys were at $4.10 or so. Distrib was the insane at that point. Have built a nice position,with avg price iaeound $8.50.

Any reason to worry about this one? I’d love to ride this horse indefinitely.
Prudent Capitalist Prudent Capitalist 11 months ago
There is no controversy with this holding wshaw, thus the lack of posting activity. ET is such a tremendous investment there isn't that much to discuss while we continue to bank our 10+% Distributions to add to the rising share price. Of course, for those of us who have automatically reinvested our profitable Distributions for years, including during the COVID period when the share price plummeted, it is even better.
wshaw14 wshaw14 11 months ago
Thanks for the message. I dont know why but folks seem to have lost interest in this message board. I think it is only temporary.
wshaw14 wshaw14 11 months ago
City of Nederland sale of approximately 800 acres for $5.9M leading to “future economic development” Published 6:21 pm Monday, March 27, 2023

Read more at:
Prudent Capitalist Prudent Capitalist 11 months ago
And this new deal makes ET even more golden.
Energy Transfer: Kevin O'Leary Says Energy Looks Golden - I Agree
wt22 wt22 11 months ago
Wshaw. just wanted to let you know there is someone reading your post. I wish the board was more active. keep posting and thanks.

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