If some people choose not to invest in a particular master limited partnership because the underlying energy holding contains too much debt, I don’t blame them. That is sound investment analysis! If others don’t invest in an MLP because they invest through IRA accounts and they do not want to deal with the specialty rules that exist for IRAs that generate more than $1,000 in unrelated business tax income (UBTI), I understand and agree. And if some people just plain don’t understand this class of investments, that’s a fantastic reason to avoid MLP investments (sticking to your circle of competence and not straying is a properly well-regarded Warren Buffett quip, so long as it isn’t a crutch to stop learning).
But the dumbest reason I have heard for avoiding the MLP sector is the fear of dealing with the K-1 statement, usually described in hush hush terms as though it … Read the rest of this article!
The post K-1 Fears For MLP Taxes Are Overblown first appeared on The Conservative Income Investor.