answersLogoWhite

0


Best Answer

Assuming you mean owning a share in a master limited partnership (MLP)as an investor, he short answer is: you get tax-deferred income on a quarterly basis, and pay income tax on your share of partnership income, which is usually far smaller than the distribution. The long anwer: the important thing about an MLP, or any partnership, is pass-through taxation. That is, an MLP does not pay an entity level tax the way a corporation does. Rather, the partners--that is you and the other unitholders--are allocated their proportionate shares of all tax items, net them out, and pay the tax on the resulting taxable income. So, you will be allocated a share of the partnership's income, its depreciation deductions, etc. All this is on paper--you don't actually receive an amount equal to your share of income. You do, however, receive a quarterly distribution, which is like a dividend, except that it is treated differently for tax purposes. Because the partnership doesn't pay a tax, it can pay out more of its income to you in case than a corporation typically can. Instead of being taxed currently, the distribution is subtracted from your basis in your partnership units. When you sell your units, your taxable gain is the difference between your sales price and your adjusted basis, so the tax on the distributions is collected then. While the distributions lower your basis, your share of taxable income and other things increase it, and so it takes longer than you might think to get your basis to zero. If you ever do get to zero, the distributions would become taxable. For more information, visit the website of the MLPs' trade association, the National Association of Publicly Traded Partnerships (http://www.naptp.org)...the answer is being submitted by its executive director.

User Avatar

Wiki User

โˆ™ 2008-03-01 01:32:37
This answer is:
๐Ÿ™
0
๐Ÿคจ
0
๐Ÿ˜ฎ
0
User Avatar

Add your answer:

Earn +20 pts
Q: What are the tax consequences of owning a master limited partnership?
Write your answer...
Submit
Related questions

Proprietorship versus partnership?

A person owning a business is a proprietor and more than one are in a partnership.


A partnership will take a carryover basis in an asset it acquires when?

a partner owning 25% of partnership capital and profits sells the asset to the partnership


What is Patnership?

The term partnership refers to multiple people owning 1 thing. If 2 people have went together and purchased a business, this is a partnership.


Which of the following is an advantage of setting up a business as a partnership?

The risks of owning the business are divided among a group of people Study Island. :)


Was voting in the US largely limited to property owning white males in the 1700s?

yes


What are the advantages and disadvantages of a private limited company?

One disadvantage to owning a private company is the fact that financing the business may be difficult. An advantage to owning a private company is the fact that you are in control of your business decisions.


Owning a business should you have a master degree?

There are no educational requirements for owning and operating a business. However, a degree in business would be extremely beneficial, and lack of a business education today is one major reason why some businesses fail.


What are the mobsters achievements?

opening a bank account banking $1,000,000 banking $10,000,000 banking $1,000,000,000 making 1 bounty hit making 5 bounty hits making 10 bounty hits making 20 bounty hits completing 5 missions completing 50 missions completing 1,000 missions completing 5,000 missions whacking 1 mobster Cold Blooded whacking 10 mobsters whacking 100 mobsters whacking 5,000 mobsters growing to a mob size of 5 growing to a mob size of 50 growing to a mob size of 500 growing to a mob size of 1,000 reaching level 3 on day 1 reaching level 10 on day 1 reaching level 20 on day 1 reaching level 40 on day 1 owning 1 El Camino owning 25 Ambulances owning 50 Rhino Tanks owning 100 Cold War-Era Gunboats owning 10 Pump-Action Shotguns owning 25 RPG Launchers owning 50 Sarin Gas Sprayers owning 100 Police Escorts owning 1 Limited Edition Item owning 4 (different) Limited Edition Items owning 10 (different) Limited Edition items getting 3 Crowbars in the Godfather's slot machine getting 3 Bentleys in the Godfather's slot machine getting 3 Tanks in the Godfather's slot machine winning the jackpot in the Godfather's slot machine


How do you say owning in french?

owning = possรฉder


What advantages does McDonald's have in developing countries?

what are the advantages of owning mcdonalds franchsie what are the advantages of owning mcdonalds franchsie what are the advantages of owning mcdonalds franchsie what are the advantages of owning mcdonalds franchsie what are the advantages of owning mcdonalds franchsie


What is the age requirement for owning a gun?

What is the age on owning a riffle


What is a dog owning mother called?

A dog owning mother


What is marital discrimination at in HOA in Las Vegas NV?

Read your governing documents to determine how they are allowed to discriminate. Your state law and Federal Housing laws may supersede governing documents, however, when it comes to the legality of -- and real estate rights of people involved in -- marital partnerships. If you entered into a marital partnership while owning property governed by an HOA, the board is burdened with the proof that your partnership is somehow not allowed. HOAs -- and sellers -- are not in the business of screening potential buyers according to any marital partnership guidelines.


Which is the rich land owning class of Romans?

The patricians were originally the rich land owning class of Romans.The patricians were originally the rich land owning class of Romans.The patricians were originally the rich land owning class of Romans.The patricians were originally the rich land owning class of Romans.The patricians were originally the rich land owning class of Romans.The patricians were originally the rich land owning class of Romans.The patricians were originally the rich land owning class of Romans.The patricians were originally the rich land owning class of Romans.The patricians were originally the rich land owning class of Romans.


What is the duration of Owning Mahowny?

The duration of Owning Mahowny is 1.73 hours.


How were corporations different form partnerships?

In both corporations and partnerships, the ownership of the company is shared among different people, shareholders in the case of corporations and partners in the case of a partnership. But there are two major differences between corporations and partnerships in the way their owners are treated by law: A corporation is a separate legal entity from the people who own it. If the corporation owes money, whether due to ordinary business problems or an insurance liability or a fine, the shareholders do not have to contribute any money to pay off the debt. In a partnership, the general partners are liable for any money that the partnership owes - in fact, each general partner is "jointly and severally liable" for the full amount, meaning that even if just one partner is sued, he or she would have to pay until the full amount of the debt is satisfied. On the other hand, there is a major disadvantage to owning a piece of a corporation, because the profits of the corporation are subject to corporate income tax, and then any amounts distributed to the shareholders are taxed as individual income to the shareholders. In a partnership, the taxing authorities basically treat the partnership as if it didn't exist, and tax the income of the partnership only as individual income as it is distributed to the partners. About 25 years ago, a new form of business entity was formed, called a "limited liability company" or a "limited liability partnership". This combined the best features of both corporations and partnerships, with only one level of taxation and without liability of the partners for the debts of the company.


What are some particular advantages of corporate ownership?

Owning a corporation means you have limited liability with business decisions. With a corporation, your business is considered its own entity; therefore, the business is responsible for liabilities.


When did owning a gun become illegal?

Owning a gun is not illegal if you follow the laws.


What was the Production Budget for Owning Mahowny?

The Production Budget for Owning Mahowny was $10,000,000.


When was Owning an Electric Car created?

Owning an Electric Car was created in 2010.


What are the negatives of owning a ford or dodge or Chevy truck what are the positives of owning these trucks?

The negatives of owning a Ford or Dodge or Chevy truck is that they are costly to maintain.


What are 2 advantages of owning dominos pizza?

Owning a franchise tends to be a bit easier than owning a business and a pizza business is a lucrative field.


Disadvantages of local business?

One disadvantage to owning a local business is the fact that the business is limited to the local area. With a national organization, there is more potential to earn money because they have more customers.


Which state's constitution granted suffrage to all inhabitants who met a property qualification allowing property owning women to vote until an 1807 amendment limited suffrage to males?

new jersey


What are the pros and cons of owning a Patek Philippe watch?

There are many. For cons, it is pricey, and limited in selection; as far as the pros, it is a well known luxury brand, and very durable for those who choose to buy it.