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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]
Investors can own MLPs directly in tax-exempt accounts but may have to worry about UBIT if UBTI exceeds $1,000. ... Summary Unrelated Business Taxable Income (UBTI) is the income that can trigger ...
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 ...
A fund that predominantly owns MLPs provides the potential for tax-deferred income with additional conveniences relative to direct investment in an MLP, namely diversified exposure, a Form 1099 ...
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.
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.
Here’s how a master limited partnership works, examples of MLPs and their pros and cons.
Learn how to download and install or uninstall the Desktop Gold software and if your computer meets the system requirements.