National Financial Services LLC - Constant Contact
National Financial Services LLC PO Box 673004 Dallas, TX 75267-3004
< CUSTOMER NAME > < N&A LINE 1 > < N&A LINE 2 > < N&A LINE 3 > < CITY, STATE, ZIP CODE >
Month Day, Year
Dear Retirement Plan account owner,
Re:
We are writing to inform you of a requirement that may affect one or more of the holdings in your Premiere Select? Retirement Plan ("plan") account. If you are not the Plan Sponsor for the Plan, please forward a copy of this letter to your Plan Sponsor/Administrator.
When a retirement plan account earns active business income, this is unrelated business taxable income (UBTI) under federal tax law and is subject to its own tax. If unrelated business income is $1,000 or more per year for the plan, the Internal Revenue Service (IRS) requires reporting of the UBTI on Form 990-T and the payment of an excise tax.
UBTI tends to be generated by the following types of investment vehicles:
? limited partnerships (LPs) -- businesses owned by more than one person, with limited liability to the owners for business debt
? master limited partnerships (MLPs) -- a type of LP that is publicly traded and often found in the energy sector (mining, "fracking," exploration)
What this means
Starting in 2017 (for tax year 2016), but only to the extent the plan generates reportable UBTI in 2016 and thereafter, National Financial Services LLC ("NFS") as agent for Fidelity Management Trust Company ("FMTC"), the directed trustee for your Premiere Select Retirement Plan will complete and file Form 990-T on behalf of the Premiere Select Retirement Plan.
If and when a Form 990-T filing is required and taxes are due to the IRS, NFS will deduct an attributable amount of tax from each Retirement Plan account's core account investment vehicle (core account) based on the LP or MLP holdings in that account. Any amounts remitted to pay this tax will not be reported as a tax-reportable distribution on IRS Form 1099-R.
You have been identified as a participant in the Plan with a LP and/or MLP holding. As a result your account may be impacted by the process outlined above.
Failure to file Form 990-T and pay any required UBTI tax can result in penalties.
We will notify you later this year if your account holds positions that generated UBTI and is required to pay UBTI tax for tax year 2016. Taxation issues related to UBTI can be complex. Please contact your broker-dealer, , and/or your tax advisor and refer to for more information about IRS Form 990-T.
Sincerely, National Financial Services LLC
Clearing, custody, or other brokerage services may be provided by National Financial Services LLC, Member NYSE, SIPC. 787714.1.0
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