Author Topic: BAM - Brookfield Asset Management  (Read 308799 times)

ValueMaven

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Re: BAM - Brookfield Asset Management
« Reply #850 on: January 06, 2019, 10:01:44 AM »
Yes I am. 

I believe I am right here, but I am open to different views.  Why even risk this UBTI issue with all of the subs?? Just own BAM and you are fine. 




... If I understand what your asking, research Brookfield Assets Property Reit.  https://bpy.brookfield.com/en/bpr ...

Mark,

That may be right with regard to BPY, which has BPR as "company/REIT mirror" - via a conversion option/peg - which I just happen to hate. [BPR = former GGP.] So ValueMaven's question still apply for [at least] BEP, BIP, BBU [& also PVF.UN, for that matter].

Supplementary question here for ValueMaven : Are you a US citizen?


chrispy

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Re: BAM - Brookfield Asset Management
« Reply #851 on: January 06, 2019, 10:55:09 AM »
I believe that historically they have not triggered UBTI with the LPs
« Last Edit: January 06, 2019, 10:59:46 AM by chrispy »

ValueMaven

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Re: BAM - Brookfield Asset Management
« Reply #852 on: January 06, 2019, 11:01:43 AM »
understood - but its possible...why even risk owning them in a nontaxable??  Just own BAM, and you dont have to worry - and you get indirect ownership too...


Spekulatius

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Re: BAM - Brookfield Asset Management
« Reply #853 on: January 06, 2019, 01:32:54 PM »
How can you own BIP in a non-taxable account like an IRA??  It’s a limited partnership…I thought distributions from an LP in a non-taxable account would trigger an unrelated business taxable income, or UBTI??

I believe you can own BAM in a non-taxable account, but if they start spinning stuff off again, you need to sell before you receive a cash-distribution.

I've not heard of any US based custodian that doesn't allow for purpose of a publicly traded partnership inside of an IRA, though I suppose it may be possible.  Though other types of plans (like a 401k) can definitely restrict such investments. 

It isn't the distributions that cause the UBTI, as the income from the PTP isn't the same as the cash received from it (as a distribution).  Instead, you have to wait until the K-1 is generated at year end to determine how much UBTI and income the PTP generated (as it depends on many factors, including your purchase price and date).  Though, it does seem like some custodians treat the ordinary gain on disposal of a PTP as income subject to UBTI, which is a much bigger issue (due to how taxation works for partnerships and the operations of most PTP).  Though to my knowledge, this is still a bit of a grey area due to the complexity of the tax code (though I've heard of various NFP examinations started by the IRS where they found this fact pattern and required the NFP to treat this ordinary income
as UBTI and assessed tax on it).

You can read a little bit more at https://content.rwbaird.com/RWB/Content/PDF/Help/Taxation-Master-Limited-Partnerships-FAQs.pdf

My understanding is that Interactive Brokers does not allow LP in IRA’s any more. This is an email that I received from them in 2016:

Quote
You are receiving this notice as your IRA account U**** currently holds positions in securities which must be closed or transferred prior to December 23, 2016.  As background, these securities represent publicly traded interests in limited partnerships, the holding of which IB will no longer support for retirement accounts.  A list of the securities in which you hold positions is provided in the table below.
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John Hjorth

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Re: BAM - Brookfield Asset Management
« Reply #854 on: January 06, 2019, 01:59:20 PM »
Thank you very much for contributing here, Spekulatius,

This was exactly my suspicion [what you just posted]. There is naturally a reason for this. [No need to go in detail with my local [Danish] tax law conditions here - not relevant for the majority of other CoBF members here.] I think I'll try to open a topic about it in the personal finance forum. I think that may be an issue for any some non-Canadian members & investors for these LPs.

I also take it as a given, that Al knows exactly how this is handled for a Canadian investor, by the way.
« Last Edit: January 06, 2019, 02:11:50 PM by John Hjorth »
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ValueMaven

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Re: BAM - Brookfield Asset Management
« Reply #855 on: January 06, 2019, 02:15:40 PM »
Again, goes back to my point here... 

For US holders - in nontaxable accounts...you can really only own BAM


Packer16

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Re: BAM - Brookfield Asset Management
« Reply #856 on: January 06, 2019, 02:35:06 PM »
You can hold BIP in an IRA I do at Vanguard.  Here is the info from BIPs website:

Brookfield Infrastructure Partners L.P. units qualify for IRA accounts. Brookfield Infrastructure Partners L.P. is a qualified investment for RRSPs, deferred profit sharing plans, RRIFs, registered education savings plans, registered disability savings plans and TFSAs.

https://bip.brookfield.com/en/stock-and-distribution/tax-information

They also describe the UBTI issue:

Brookfield Infrastructure Partners L.P.  has not and is not expected to generate UBTI, a concept relevant to U.S. tax exempt investors. All of Brookfield Infrastructure Partners L.P.'s operations are carried out through wholly-owned subsidiary corporations. Brookfield Infrastructure Partners L.P. currently has access to a revolving credit facility that if utilized, may generate UBTI. However, it is not anticipated that Brookfield Infrastructure Partners L.P. will use such credit facility. Brookfield Infrastructure Partners L.P. has not and is not expected to generate debt financed UBTI.

Packer
« Last Edit: January 06, 2019, 02:38:15 PM by Packer16 »

Spekulatius

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Re: BAM - Brookfield Asset Management
« Reply #857 on: January 06, 2019, 03:16:13 PM »
Thank you very much for contributing here, Spekulatius,

This was exactly my suspicion [what you just posted]. There is naturally a reason for this. [No need to go in detail with my local [Danish] tax law conditions here - not relevant for the majority of other CoBF members here.] I think I'll try to open a topic about it in the personal finance forum. I think that may be an issue for any some non-Canadian members & investors for these LPs.

I also take it as a given, that Al knows exactly how this is handled for a Canadian investor, by the way.

I am in the US.
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chrispy

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Re: BAM - Brookfield Asset Management
« Reply #858 on: January 06, 2019, 06:30:01 PM »
I have owned BIP, and currently own BBU, in IRAs with fidelity and vanguard
« Last Edit: January 06, 2019, 06:36:16 PM by chrispy »

Spekulatius

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Re: BAM - Brookfield Asset Management
« Reply #859 on: January 06, 2019, 06:47:33 PM »
I have owned BIP, and currently own BBU, in IRAs with fidelity and vanguard

Every broker is different. I believe Interactive Brokers is concerned about dealing with UBTI, so they prevent this by prohibiting ownership in LP in IRA’s. I do know that Fidelity let’s you own LP’s in IRA’s.
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