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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]
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 ...
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 ...
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 ...
Individual retirement accounts generally are subject to tax on income that is taxable to most U.S. tax-exempt entities under 26 U.S.C. §511. 26 U.S.C. §408 contains many of the rules governing the treatment of Individual retirement accounts. §408(e)(1) states: "Any individual retirement account is exempt from taxation under this subtitle ...
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 ...
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 ...
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 ...