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It combines the tax benefits of a partnership with the liquidity of publicly traded securities. To obtain the tax benefits of a pass through, MLPs must generate at least 90% or more of their income from qualifying sources such as from production, processing, storage, and transportation of depletable natural resources and minerals.
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 benefit from a tax-deferral feature on their distributions that can enable investors to defer taxes on a meaningful percentage of their distributions until they sell their units.
As good as both IRAs and MLPs sound, don't expect to completely skip paying taxes if you buy MLPs in an IRA. A section of the tax code imposes what's called the Unrelated Business Income Tax, or ...
Investors will inevitably take a short-term hit if the tax-favored status of MLPs goes away, but with so much money coming out of the energy industry, any major pullback would likely present a ...
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.
Here’s how a master limited partnership works, examples of MLPs and their pros and cons.
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 ...