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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 As high-yielding investments, they can be a great addition to an income-seeking portfolio.
In preparation for tax season, many investors are trying to find the best stocks to buy with the cash they inject into their retirement accounts before the April 15 deadline. Given the growing ...
Summary There are two types of MLP funds – those structured as RICs, which own up to 25% MLPs, and those structured as corporations, which tend to be 90-100% MLPs. Similar to direct MLP ...
When there are tax exempt investors in a fund, they are not subject to U.S. income tax, but are still required to declare and pay taxes on "Unrelated Business Taxable Income" or "UBTI". [2] For tax exempt investors, dividends , royalties , rents , capital gains and interest income are not considered UBTI, but any money earned from conduct ...
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 ...
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 ...
Investors have long been attracted to MLPs for their generous yield, but a recent survey of over 600 financial advisors shows that the tax advantages of MLPs — including the potential for tax ...