I doubt the validity of the LDA+U on MgO. Anyway, there is one paper on this topic and the U is applied on the p orbital of oxygen:
Michael Nolan, Graeme W. Watson, The electronic structure of alkali doped alkaline earth metal oxides: Li doping of MgO studied with DFT-GGA and GGA + U, Surface Science, Volume 586, Issues 1-3, 20 July 2005, Pages 25-37
For the determination of U, a possible technique is the line-response method, as implemented in the Quantum-espresso.