MLPs

I was looking at picking up SDT to put in an IRA account, but when I went to the trade page, my brokerage displayed a warning that SDT is an MLP (Master Limited Partnership), which may have tax consequences for my account:

Investments in publicly traded MLPs involve risks and considerations that may differ from investments in common stock.

Tax complexity risk: Master Limited Partnerships (MLPs) are generally considered passthrough entities for tax purposes and have special tax considerations. Pass-through entities may generate unrelated business taxable income (UBTI) that may have undesirable tax consequences for retirement accounts and other tax-exempt investors. If you hold MLP units, you are generally treated as a partner for tax purposes and will be issued a Schedule K-1 (Form 1065) rather than a Form 1099 form for use in filling out your tax return. A K-1 lists the partner's share of income, deductions, credits, and other tax items. If the MLP has operations in multiple states, you may need to file a separate tax return in each state.

An MLP that is treated as a corporation in the United States rather than a pass-through entity for federal income tax purposes would be obligated to pay federal income tax on its income at the corporate tax rate. In this case, the amount of cash available for distribution by the MLP would be reduced and part or all of the distributions made could be taxed entirely as dividend income. In this case a Form 1099 would be furnished rather than a Schedule K-1. Please see the MLP’s website, SEC filings, or most recent shareholder report for further details about tax treatment of your investments.

A search turned up a page on the National Association of Publicly Traded Partnership's site regarding MLPs and retirement accounts which has some useful information about UBIT (Unrelated Business Income Tax).  BusinessWire also has information on SDT, including a link to their tax information page.