A friendly warning for non-US MLP holders

New 10% tax on total sale proceeds goes into effect in 2023!

I only really noticed this recently. It seems that for non-US MLP holders a 10% withholding tax will have to be paid if you sell your units on a brokerage as of 2023:

As a result of recent U.S. legislation under Internal Revenue Code Section 1446(f), gross proceeds from sales of and certain distributions from Publicly Traded Partnerships ("PTPs") will be subject to 10% withholding starting on January 1, 2023.

When I first saw this I thought it was only when an MLP gets bought out. Because the alternative is so ridiculous. And my brain is bad at intepreting legalese. But it also seems to apply if you merely sell your units to someone else on a brokerage exchange. And it is total proceeds, not just capital gains!

I wrote up a few MLPs here, USD Partners and Black Stone Minerals. They are both on the list in the above link. I held some Sisecam units, not mentioned on this blog, but I did sell those as well.

So just a heads-up to sell them before 2023. As this is easy to miss. If you are not American and hold other MLPs, make sure to check the above list they are not on it.

I am hereby also removing Black Stone Minerals from the list of active ideas.

Edit: This only applies for non-US holders!