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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]
Here’s how a master limited partnership works, examples of MLPs and their pros and cons. Skip to main content. 24/7 Help. For premium support please call: 800-290-4726 more ways to reach us ...
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 ...
Today, Gross favors a different type of income-generating investment: master limited partnerships (MLPs). Here's a look at why he prefers them over other pipeline stocks for those seeking tax ...
The university is a tax-exempt organization, and its pizza parlor generates unrelated business income. While the tuition and fees generated by the university are tax exempt, its income from the pizza parlor is not tax-exempt because the pizza parlor is unrelated to the university's educational purpose.
Master limited partnerships have become a darling for investors. As high-yielding investments, they can be a great addition to an income-seeking portfolio. The Alerian MLP ETF , which is one gauge ...
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 ...
In the following video segment, Motley Fool energy analysts Joel South and Taylor Muckerman take a deep dive into master limited partnerships, or MLPs. They discuss what an MLP is and how ...