Partnership Withholding under IRC Sec. 1446(f)

Hello,

Following the IRC Sec. 1446(f), could you please confirm if this is already being applied in T212?
Will it be still possible to buy MLP’s stocks (such as $EPD, $ET, $MMP…)?

Source: https://www.irs.gov/individuals/international-taxpayers/partnership-withholding

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I’d also be interested in the answer.

Other brokers are forcing clients to sell the likes of Icahn Enterprises.

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Me too I would appreciate an official communication from TR212.
Because I currently own the following Energy stocks : MPLX, ET, EPD, MMP, CEQP.

So I would like to know in advance what will happen to my shares of the above mentionned stocks.

Thanks in advance !

Since all of Trading212’s custody operations are ran via Interactive Brokers it is possible (although not guaranteed) that Trading212 could continue to trade these Partnerships post US1446F implementation (Jan 2023?). The question is : do Trading212 want to? It will pose an additional operational burden - but most of which should be shouldered by IB.

The question of ‘what happens’ is pretty easy: You’ll be taxed at point of sale regardless of any profit. The % for non US clients will be deducted at source and passed to the IRS on your behalf. You will have no say in the matter (assuming you’re not a US citizen).

It will likely kill volumes in these assets as the tax burden is so great. It’s therefore operationally possible Trading212 just stop selling these assets in the same way some other platforms are communicating already.

could a person from TR212 communicate officially ?

We’re monitoring the topic and will make sure to update you as soon as there’s any news :pray:

Yes keep us informed please :slight_smile:

A very sad day indeed. Farewell, MMP. You will always have a dear place in my heart.

Also, f*ck the IRS.

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Now to find where to reinvest 25% of my portfolio :upside_down_face:

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Just to confirm, EPD is includes in this this “forced sale” Correct? @Bogi.H

Yes it is. IBKR had a list you can take a look at.
https://ibkr.info/tag/tax-reporting

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Thank you @Zergui
Indeed a very sad day!
Currently hold 69 shares of EPD. It was a long term holding. At least i up 27%

Yeah I had 45 EPD and 88 MMP. Locked in a nice profit still, but the last cash flow won’t be easily replaced.

Couldn’t agree more on the dividend cashflow😶
I will probably direct some of this cash to LYB

Sadly had to make a £95 loss on AllienceBernstein through this.

Not sure whether to Invest in US REITs either if they keep changing the rules so that it stops foreign investments in the future.

May just focus on the UK as I have a feeling the rules will change in Europe as well.

Does anyone know what the reasoning is for this sales tax for non-US residents? Don’t they want foreign investors?

I have Energy Transfer in my portfolio and will have to look for a replacement unfortunately.

More on the subject can be found here: Publicly Traded Partnerships (PTP) Update - December 2022 – Trading 212

It’s not really about refraining foreign ownership. Basically US residents are taxed at a personal level on Partnership, since they are not corporation and aren’t taxed at a corporate level.

But the IRS, while trying, struggle to get foreigners to file their tax with them (who would have thought :upside_down_face:).

This new measure is to rebalance the tax revenue between locals and foreigners, and entice foreigners, when they get overtax upon selling their assets, to file with the IRS to claim that money back.

US being US.

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There are a lot of discounted ITs like CHRY. I have hope that once they realise the value of some of the underlying holdings, the discount to NAV would reduce and provide some good returns.

In all serious though, DYOR or just buy a global equity thingy.

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I think @Vedran also invested in MMP, he might not be too happy either… The “troll” being “trolled”? :thinking:

P.S. The reference to troll is his comment on “Trolleybus” on his profile :smile:

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I think that TR212 published a list of all the stocks impacted.