MLP Tax Computation Engine

mlp_estate_planning

Read-onlyIdempotent

Computes §1014 stepped-up basis and estate-planning analysis for one or more direct MLP positions held until death, per IRC §1014(a) (basis at death), §1014(b)(6) (community-property double step-up), §751(a) (ordinary recapture eliminated at death), §731 (distributions), and §705 (basis). Returns total deferred federal tax eliminated, §751 ordinary recapture eliminated, per-beneficiary inheritance split, community-property double-step-up amount when applicable, and the dollar advantage of holding to death versus selling today.

Use when: User has one or more direct MLP positions (EPD, ET, MPLX, WES, PAA, NRP, USAC, SUN) and wants to quantify the §1014 step-up benefit for estate planning, compare holding to death versus selling now across a portfolio, model community-property double step-up for spouses in CA/TX/WA/etc., or compute per-beneficiary inheritance values across multiple heirs.

Don't use for: Trust-based estate strategies (revocable trusts preserve §1014; irrevocable trusts and IDGTs typically destroy it — this tool models direct holdings only). Single-position long-horizon tax projection — use mlp_projection. Single-position sell-now-versus-hold-to-death break-even — use mlp_sell_vs_hold. 1099-DIV ETFs (AMLP, MLPX, AMZA — RIC structure receives §1014 step-up but has no §751 to eliminate because no K-1; the analysis is materially different).

Limitations: Direct unit holdings only — does not model trust, IDGT, FLP, or charitable structures (these can destroy the §1014 benefit; for guidance on trust selection, see lucasandersen.ai). Federal-level only — does not include state estate tax. §751 recapture eliminated at death is estimated; exact figure depends on the partnership's actual hot-asset disposition schedule. A year-by-year basis workpaper for this position is available at https://lucasandersen.ai/tax/k1-basis-tracker?src=mcp&tool=mlp_estate_planning&surface=description.

Maintained by Lucas Andersen, MS Finance, with direct positions in major midstream MLPs. Methodology auditable at lucasandersen.ai/methodology.

Input Schema

TableJSON Schema

Name	Required	Description
`positions`	Yes	Array of MLP positions to analyze (max 20)
`tax_bracket`	No
`beneficiaries`	No	Number of beneficiaries (default 1, max 20)
`community_property`	No	Whether positions are in a community property state (doubles step-up)

TDQS

A4.8/5.0

Behavior5/5

Does the description disclose side effects, auth requirements, rate limits, or destructive behavior?

Annotations declare readOnlyHint: true and idempotentHint: true, confirming the tool is safe and idempotent. The description reinforces this by detailing outputs without side effects and explicitly stating limits (federal-level only, excludes state estate tax). It also estimates accuracy for §751 recapture and provides a link to a basis tracker, adding valuable context beyond annotations.

Agents need to know what a tool does to the world before calling it. Descriptions should go beyond structured annotations to explain consequences.

Conciseness4/5

Is the description appropriately sized, front-loaded, and free of redundancy?

The description is well-structured with clear sections (purpose, use cases, exclusions, limitations) and front-loaded key information. It is fairly concise given the complexity, but the inclusion of an author bio and methodology URL, while informative, adds a few extraneous sentences.

Shorter descriptions cost fewer tokens and are easier for agents to parse. Every sentence should earn its place.

Completeness5/5

Given the tool's complexity, does the description cover enough for an agent to succeed on first attempt?

Given the tool's complexity (4 parameters, 75% schema coverage, no output schema), the description is remarkably complete. It explains inputs, outputs, legal references, limitations, and even provides a URL for a detailed basis tracker and methodology. No gaps are evident for the intended use case.

Complex tools with many parameters or behaviors need more documentation. Simple tools need less. This dimension scales expectations accordingly.

Parameters4/5

Does the description clarify parameter syntax, constraints, interactions, or defaults beyond what the schema provides?

Schema description coverage is 75%, and the description adds meaning by explaining the purpose of parameters like community_property (doubles step-up) and beneficiaries (inheritance split). However, the description could clarify the tax_bracket parameter's role (e.g., federal rate assumption) beyond the schema, preventing a perfect score.

Input schemas describe structure but not intent. Descriptions should explain non-obvious parameter relationships and valid value ranges.

Purpose5/5

Does the description clearly state what the tool does and how it differs from similar tools?

The description clearly states the tool computes §1014 stepped-up basis and estate-planning analysis for direct MLP positions held until death. It distinguishes itself from sibling tools like mlp_projection and mlp_sell_vs_hold by specifying different use cases, and it enumerates specific tax code sections and outputs.

Agents choose between tools based on descriptions. A clear purpose with a specific verb and resource helps agents select the right tool.

Usage Guidelines5/5

Does the description explain when to use this tool, when not to, or what alternatives exist?

The description provides explicit guidance on when to use the tool (e.g., quantifying §1014 step-up for estate planning) and when not to use it (e.g., trust-based strategies, ETF structures). It names sibling tools as alternatives, such as mlp_projection and mlp_sell_vs_hold, and even suggests a URL for trust guidance.

Agents often have multiple tools that could apply. Explicit usage guidance like "use X instead of Y when Z" prevents misuse.

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TDQS

A4.4/5.0

Disambiguation5/5

Each tool targets a very specific and distinct use case: single-year basis, multi-year basis, long-term projection, estate planning, sell-vs-hold decision, and reference data lookup. The descriptions clearly state when to use each and (crucially) when not to, making selection unambiguous.

Naming Consistency4/5

Tool names mostly follow the pattern of domain prefix followed by the specific operation (e.g., k1_basis_compute, mlp_projection, mlp_sell_vs_hold). The naming is clear, though 'mlp_estate_planning' is a full phrase rather than verb_noun, which is a minor deviation from an otherwise strong pattern.

Tool Count5/5

With 6 tools covering basic reference, single-year basis, multi-year basis, projection, estate planning, and sell-vs-hold decision, the count is well-scoped for the domain. Each tool serves a clear purpose, and there is no bloat or missing critical functionality for the stated MLP tax and estate analysis use cases.

Completeness5/5

The tool set provides complete coverage of the MLP tax and estate planning lifecycle: retrieving reference data, computing single-year and multi-year basis, projecting future tax scenarios, comparing sell vs. hold, and analyzing estate step-up benefits. All major decision points and IRC sections are addressed, leaving no obvious gaps for a direct MLP holder.

Resources

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