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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]
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
A section of the tax code imposes what's called the Unrelated Business Income Tax, or UBIT, on IRAs with MLP income exceeding $1,000 annually. Those who have worked with non-profit organizations ...
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 ...
Unrelated Business Income Tax (UBIT) in the U.S. Internal Revenue Code is the tax on unrelated business income, which comes from an activity engaged in by a tax-exempt 26 U.S.C. 501 organization that is not related to the tax-exempt purpose of that organization.
MLPs serve as a highly tax-efficient way to own midstream energy infrastructure assets, with ETFs offering an easy, affordable way for investors to gain exposure to the industry. Many investors ...
Typically, 70-100% of MLP distributions have been considered a tax-deferred return of capital, which means one does not pay taxes on that portion of the distribution until the investor sells his ...
They discuss what an MLP is and how companies in the energy sector can use them to create. In the following video segment, Motley Fool energy analysts Joel South and Taylor Muckerman take a deep ...