MVPS AMONG MLPS

摘要

More than 2.6 million miles of pipelines crisscross the country carrying oil, natural gas and a wide swath of derivative liquids and refined products. While oil and gas companies are often the owners of pipelines, so, too, are many individual investors who own interests in master limited partnerships. Like real estate investment trusts, MLPs are "pass through" entities that pay no tax on profits at the corporate level as long as 90% of income is derived from qualified natural resource businesses like mining, processing, refining, transportation and storage. MLP unit holders pay tax at their own individual rates on cash distributions, most of which are considered return of capital rather than profit, thanks to high noncash expenses like depreciation and amortization that reduce taxable income.