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Instead of a Form 1099, MLP investors receive a Schedule K-1 tax form. As a consequence of their pass-through status, holding MLPs in tax-exempt accounts may generate Unrelated Business Income Tax (UBIT). [2] To encourage tax-exempt investors, some MLPs set up C corporation holding companies of limited partner which can issue common equity. [3]
The Alerian MLP ETF , which is one gauge of the broader MLP industry, has a trailing-12-month dividend yield of 5.95% compared with the S&P 500 average of 2.16%.
Instead, we emphasize MLP-specific metrics like enterprise value to EBITDA (EV/EBITDA), distribution coverage ratio, and today's focus: price to distributable cash flow (P/DCF). How the metric works
Similar to direct MLP investment, return of capital distributions from an MLP fund structured as a corporation lower an investor’s basis, and taxes are not [...] Beyond the K-1: Tax Treatment ...
Structure of a private equity or hedge fund, which shows the carried interest and management fee received by the fund's investment managers. The general partner is the financial entity used to control and manage the fund, while the limited partners are the individual investors who receive their return as capital interest.
ETNs use a different method to get around the K-1 problem, arguing that because they represent a debt obligation rather than a direct interest in an MLP, the income ETNs generate is interest ...
As pass-through entities, master limited partnerships don't retain much cash relative to what they generate quarter after quarter, year after year. As a result, MLPs have to issue debt to fund ...
That means there are plenty of MLPs like Northern Tier Energy , Linn. The pool of master limited partnerships with an investment grade rating is pretty small. In fact, only 16 of them have been ...