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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]
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.
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 ...
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 ...
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 ...
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 ...
Form 1098-T, Tuition Statement, is an American IRS tax form filed by eligible education institutions (or those filing on the institution's behalf) to report payments received and payments due from the paying student. The institution has to report a form for every student that is currently enrolled and paying qualifying tuition and related expenses.
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 ...