Yes, but you will not be able to take advantage of return of capital (ROC). Placing investments that are already tax-advantaged in a tax-sheltered account isn’t the most efficient allocation of resources; hold MLP units in brokerage accounts and keep your IRAs and 401(k) plans for more traditional fare.

If unrelated business taxable income (UBTI) exceeds $1,000 for the entire account, the plan administrator will be forced to file a return and pay an unrelated business income tax (UBIT) from available funds. Also, UBTI is unlikely to be that high across accounts unless you have $1 million or more invested in MLPs in your IRA. That’s because many MLPs actually generate negative UBTI, which offsets positive UBTI.That said, you can hold closed-end MLP funds in your IRA without generated UBTI.

There are two publicly traded US MLPs known as i-units. I-units don’t pay cash distributions to shareholders. Instead, these units pay distributions in the form of additional units. Instead of passing through the cash distributions, however, i-units simply pays unitholders in the form of additional shares of the MLP, in many ways equivalent to a dividend reinvestment program (DRIP plan).

Although this might seem a rather pointless arrangement, it’s not. The MLP doesn’t issue a K-1 form for unitholders, and the share distributions don’t generate UBTI. Therefore, i-shares can be held in tax-advantaged accounts and offer a more simplified tax structure.

Of course, if you hold the i-shares long enough, your capital gains will be taxed at the long-term capital gains tax rate. Moreover, you don’t get any actual cash income until you sell the units.