Happy Bday stephen4785!!

[slow99]

ok. whats an mlp lol

Asset class, largely levered to energy and provides yield substitution ... from wiki:


Master limited partnership (MLP) is a limited partnership that is publicly traded on a securities exchange. It combines the tax benefits of a limited partnership with the liquidity of publicly traded securities.

MLPs are limited by United States Code to only apply to enterprises that engage in certain businesses, mostly pertaining to the use of natural resources, such as petroleum and natural gas extraction and transportation. To qualify for MLP status, a partnership must generate at least 90 percent of its income from what the Internal Revenue Service (IRS) deems "qualifying" sources. For many MLPs, these include all manner of activities related to the production, processing or transportation of oil, natural gas and coal.[1]

Some real estate enterprises qualify for a similar tax treatment as a real estate investment trust. Other publicly traded partnerships, such as Blackstone Group or Cedar Fair, do not qualify for pass-thru tax status and must pay federal corporate income taxes.

In practice, MLPs pay their investors through quarterly required distributions, the amount of which is stated in the contract between the limited partners (the investors) and the general partner (the managers or GP). Typically, the higher the quarterly distributions paid to limited partners, the higher the management fee paid to the general partner. This provides the general partner with an incentive to maximize distributions through pursuing income-accretive acquisitions and organic growth projects.[citation needed] Failure to pay the quarterly required distributions may constitute an event of default.[citation needed]


Because MLPs are classified as partnerships, they avoid corporate income tax at both state and federal levels. Additionally, limited partners may also record a pro-rated share of the MLP's depreciation on their own tax forms to reduce liability.[citation needed] This is the primary benefit of MLPs and gives MLPs relatively cheap funding.

The tax implications of MLPs for individual investors are complex. While distributions from MLPs are taxed at the marginal rate of the limited partner, there may be no tax advantage to claiming the pro-rated share of the MLP's depreciation when the investments is held in a tax deferred account.[citation needed] To encourage tax-deferred investors, many MLPs set up corporation holding companies of limited partner claims which can issue common equity.[2]

[stephen4785]

Asset class, largely levered to energy and provides yield substitution ... from wiki:


Master limited partnership (MLP) is a limited partnership that is publicly traded on a securities exchange. It combines the tax benefits of a limited partnership with the liquidity of publicly traded securities.

MLPs are limited by United States Code to only apply to enterprises that engage in certain businesses, mostly pertaining to the use of natural resources, such as petroleum and natural gas extraction and transportation. To qualify for MLP status, a partnership must generate at least 90 percent of its income from what the Internal Revenue Service (IRS) deems "qualifying" sources. For many MLPs, these include all manner of activities related to the production, processing or transportation of oil, natural gas and coal.[1]

Some real estate enterprises qualify for a similar tax treatment as a real estate investment trust. Other publicly traded partnerships, such as Blackstone Group or Cedar Fair, do not qualify for pass-thru tax status and must pay federal corporate income taxes.

In practice, MLPs pay their investors through quarterly required distributions, the amount of which is stated in the contract between the limited partners (the investors) and the general partner (the managers or GP). Typically, the higher the quarterly distributions paid to limited partners, the higher the management fee paid to the general partner. This provides the general partner with an incentive to maximize distributions through pursuing income-accretive acquisitions and organic growth projects.[citation needed] Failure to pay the quarterly required distributions may constitute an event of default.[citation needed]


Because MLPs are classified as partnerships, they avoid corporate income tax at both state and federal levels. Additionally, limited partners may also record a pro-rated share of the MLP's depreciation on their own tax forms to reduce liability.[citation needed] This is the primary benefit of MLPs and gives MLPs relatively cheap funding.

The tax implications of MLPs for individual investors are complex. While distributions from MLPs are taxed at the marginal rate of the limited partner, there may be no tax advantage to claiming the pro-rated share of the MLP's depreciation when the investments is held in a tax deferred account.[citation needed] To encourage tax-deferred investors, many MLPs set up corporation holding companies of limited partner claims which can issue common equity.[2]