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Author: PCScipioA One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35640  
Subject: Re: The Best Yields for the Next 10 Years Date: 11/15/2009 4:51 PM
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For those who may need it, there's good primer on MLPs at Alerian: http://www.alerian.com/MLPprimer.pdf

For those who don't, I have some questions:

1. On p. 14 of the primer it says "...investors, will continue to receive K-1s, and will be required to file tax returns in the states in which the MLP operates." (This was noted earlier in this thread.) But in the primer's appendix on Income Tax Treatment it notes: "Unlike the dividends paid by corporations, MLP distributions are considered 100% return of capital, and therefore are not taxable, and remain so until either: (1) the investor sells his units, or (2) his adjusted basis in the units reaches zero." So, why would you have to file tax returns if the distributions are ROC?

2. The same appendix states: "US tax-exempt investors, including pension funds and IRAs, generally cannot own MLPs as they will generate UBTI for the investor." Is this true or is the abovementioned $1,000 window applicable?

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