Quote:
Originally Posted by GregWeld
Master Limited Partnerships (MLP's) "dividend" is actually structured as a "return of capital" rather than a dividend or interest. Therefore the taxes on the "dividend" which is really a return of your capital is treated differently ---- UNTIL YOU SELL!! Of course this is over simplified...
90% of the income of an MLP by definition must be derived from REAL ESTATE - or NATURAL RESOURCES or COMMODITIES. Thus there is no "bank" MLP etc.
The two you mentioned are not themselves MLP's but rather ETF's (exchange traded funds) that INVEST in MLPS to drive their own income and thus declare a dividend to the shareholders.
Of the two mentioned - I'd personally invest in KYN (Kayne Anderson) over Alerian (neither of these are actually MLP's - they derive their income from MLP's).
[B]It's important to note AND UNDERSTAND an MLP (where you are not a shareholder but rather - you are a PARTNER) versus being a STOCKHOLDER in a publicly traded company... So I'd direct anyone interested in these (MLP'S) to go here and make sure you "get it".[/B
http://www.naptp.org/PTP101/Print/Ba...Principles.pdf |
Thanks for the insight Greg. Very helpful. The link helps provide greater detail to the topic.