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Investors can own MLPs directly in tax-exempt accounts but may have to worry about UBIT if UBTI exceeds $1,000. Investors can own ETFs that predominately hold MLPs in tax-exempt accounts and not ...
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]
Here’s how a master limited partnership works, examples of MLPs and their pros and cons.
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 ...
As pass-through entities, MLPs avoid the double taxation associated with investments in C-Corporations. Typically, 70-100% of MLP distributions have been considered a tax-deferred return of ...
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.
A blocker corporation is a type of C Corporation in the United States that has been used by tax exempt individuals to protect their investments from taxation when they participate in private equity or with hedge funds. In addition to tax exempt individuals, foreign investors have also used blocker corporations. [1]
In the following video segment, Motley Fool energy analysts Joel South and Taylor Muckerman take a deep dive into master limited partnerships, or MLPs. They discuss what an MLP is and how ...