mlp_sell_vs_hold
Compares selling an MLP position today (the §751(a) ordinary amount plus capital gain on the rest, R-751-BIFURCATION) against holding it with no sale by the holder through the projection horizon, per IRC §199A (qualified PTP income, including §751(a) gain attributable to the PTP's trades or businesses; R-199A-PTP-751-PAL) and §1411. Returns the break-even sell price: the unit price above which selling today produces more in this projection than holding with no sale (holding counts the projected value with no tax deducted, plus net distributions). It also returns the tax a sale by the holder at the projected value would carry, which is not a measure of tax saved or avoided at death; the successor's tax is not computed. If the units pass at death, the successor's basis is generally the fair market value at that date (or the §2032 alternate value where the executor elects), increased by the successor's share of partnership liabilities on that date and reduced to the extent the value is attributable to income in respect of a decedent, outside basis only; the partnership's basis in its property, from which the §751 amount on a later sale is figured, is adjusted only with a §754 election or a substantial built-in loss immediately after the transfer (R-1014-PTP-STEP-UP).
Use when: User holds a direct MLP position (EPD, ET, MPLX, WES, PAA, NRP, USAC, SUN), is approaching a sell decision, and wants a single break-even threshold to compare against the current market price. Useful for time-sensitive sell decisions, retirement-distribution planning, or comparing an unsolicited tender offer with continuing to hold.
Don't use for: Multi-position portfolio sell-ordering — this tool models a single position. For estate-planning analysis across multiple positions and beneficiaries, use mlp_estate_planning. For long-horizon basis-erosion modeling without a sell decision in view, use mlp_projection. 1099-DIV ETFs (AMLP, MLPX, AMZA): this tool does not model them.
Limitations: Single position, single lot — for portfolio-wide optimal sell ordering across multiple positions and lots, see lucasandersen.ai. Break-even price assumes the supplied tax bracket persists through the hold horizon. §751 recapture on the sell side is estimated from default ROC assumptions; actual hot-asset recapture depends on the partnership's 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_sell_vs_hold&surface=description.
Maintained by Lucas Andersen, MS Finance, with direct positions in major midstream MLPs. Methodology auditable at lucasandersen.ai/methodology.
Input Schema
| Name | Required | Description | Default |
|---|---|---|---|
| units | Yes | ||
| ticker | Yes | ||
| years_held | No | Years the position has been held (default 10) | |
| tax_bracket | No | ||
| purchase_price | No | ||
| years_to_project | No | Years to project the hold scenario (default 10) |