By: Shobana Gopal, CPA and Michelle Kelly, CFA
Making sense of taxes & MLP alphabet soup
As the holidays turn to tax season, feelings of festivity are replaced with something more like confusion and dread. And for good reason. Various investments inevitably spark tax-related questions.
Master Limited Partnerships (MLPs) have stepped into the spotlight during the last decade, and today there are approximately 130 issuers with a combined market capitalization exceeding $600 billion. Along with this growth in MLPs, comes new tax terminology akin to alphabet soup. At the same time, there are a number of different MLP investment product structures with varying tax impacts – which can be especially daunting to investors new to the sector.
Our goal with this guide is to clarify some of the tax terms and explain potential tax ramifications for an MLP investor.
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