Compares selling an MLP position today (triggering §751(a) hot-asset ordinary recapture plus §731(a)(1) long-term capital gain) against holding the position until death (where §1014(a) step-up eliminates all deferred federal tax including §751 recapture), per IRC §1(h) (LTCG rates), §199A (QBI de...
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AI agents call mlp_sell_vs_hold to retrieve information from MLP Tax Computation Engine without modifying any data. This is common in research, monitoring, and reporting workflows where the agent needs context before taking action. Because read operations don't change state, they are generally safe to allow without restrictions -- but you may still want rate limits to control API costs.
Even though mlp_sell_vs_hold only reads data, uncontrolled read access can leak sensitive information or rack up API costs. An agent caught in a retry loop could make thousands of calls per minute. A rate limit gives you a safety net without blocking legitimate use.
Read-only tools are safe to allow by default. No rate limit needed unless you want to control costs.
{
"version": "1",
"default": "deny",
"tools": {
"mlp_sell_vs_hold": {}
}
}See the full MLP Tax Computation Engine policy for all 6 tools.
These attack patterns abuse exactly the kind of access mlp_sell_vs_hold gives an agent. Each links to the full case and the policy that stops it:
Other read tools across the catalogue. The same approach applies to each: allow, with a rate cap to control cost.
Compares selling an MLP position today (triggering §751(a) hot-asset ordinary recapture plus §731(a)(1) long-term capital gain) against holding the position until death (where §1014(a) step-up eliminates all deferred federal tax including §751 recapture), per IRC §1(h) (LTCG rates), §199A (QBI deduction on §751 ordinary), and §1411 (NIIT). Returns the break-even sell price — the unit price above which selling today produces more after-tax wealth than holding through inheritance. 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 evaluating whether an unsolicited tender offer is worth accepting versus continuing to hold for §1014 step-up. 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 — RIC structure has no §751 and no K-1, so the break-even logic does not apply; use a standard capital-gains calculator). 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. Maintained by Lucas Andersen, MS Finance, with direct positions in major midstream MLPs. Methodology auditable at lucasandersen.ai/methodology.. It is categorised as a Read tool in the MLP Tax Computation Engine MCP Server, which means it retrieves data without modifying state.
Register the MLP Tax Computation Engine MCP server in PolicyLayer and add a rule for mlp_sell_vs_hold: allow, deny, rate-limit, or require approval. Point your MCP client at the PolicyLayer proxy URL and the rule is enforced on every call, before it reaches MLP Tax Computation Engine. Nothing to install.
mlp_sell_vs_hold is a Read tool with low risk. Read-only tools are generally safe to allow by default.
Yes. Add a rate_limit block to the mlp_sell_vs_hold rule in your PolicyLayer policy. For example, setting max: 10 and window: 60 limits the tool to 10 calls per minute. Rate limits are tracked per agent session and reset automatically.
Set action: deny in the PolicyLayer policy for mlp_sell_vs_hold. The AI agent will receive a policy violation error and cannot call the tool. You can also include a reason field to explain why the tool is blocked.
mlp_sell_vs_hold is provided by the MLP Tax Computation Engine MCP server (https://api.lucasandersen.ai/mcp). PolicyLayer sits as a proxy in front of this server to enforce policies before tool calls reach the server.
Deterministic rules across all 6 MLP Tax Computation Engine tools. Per-identity grants. Full audit log. Live in minutes. Nothing to install.
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