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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
Moreover, because the assets MLPs own generate substantial tax write-offs for depreciation and other expenses, the distributions that MLPs make typically don't create anywhere near the same tax ...
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.
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 ...
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 ...
Master limited partnerships (MLP) are a great way of boosting your portfolio's income as they pay out the majority of their profits to unitholders or investors. However, the MLP space can be a ...
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 ...