Master limited partnerships have been a lucrative investment
over the years, with solid income that carries tax advantages
over other investments. But many investors are scared to death of
the tax complications of MLP investing.
In the following video, Dan Caplinger, The Motley Fool's
director of investment planning, runs through the basics of MLP
taxation. Dan notes that because MLPs incur no entity-level
taxes, their investors have to deal with pass-through taxation
via K-1 forms. That introduces a big headache for tax purposes,
as K-1s are more complex than regular 1099 forms on other
investments and can also have state income tax implications even
for states other than where you live. But Dan notes that some
companies have offered solutions to the tax issue, with
Kinder Morgan Energy Partners
offering investment opportunities through
Kinder Morgan Management
has its related
entity. Dan concludes that taxes should be your only
consideration with MLP investing, but it's important to
understand the issues involved before you invest.
Take advantage of this little-known
Learn more about the tax benefits of master limited
partnerships in the latest report from The Motley Fool. In our
brand-new special report "
The IRS Is Daring You to Make This Investment
The IRS Is Daring You to Make This Investment Now!," you'll
learn about the simple strategy to take advantage of a
little-known IRS rule. Don't miss out on advice that could
help you cut taxes for decades to come.
Click here to learn more.
has no position in any stocks mentioned. The Motley Fool
recommends and owns shares of Kinder Morgan. Try any of our
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