2 Leading MLPs Paying Tax Free Stock Dividends

MLPs have become popular with investors after the Alerian MLP Index shot up 150% off its low in late 2008. In addition their yields are relatively high with tax advantage treatment. MLPs receive tax preferences because they are building energy infrastructure in the US, a national priority. However tax hassle comes with the distributions. The annual tax package is sent on a K-1 form around March of each year and is not easy to understand. Many unit holders need assistance from tax accountants or computer tax packages and then have to keep track of annual tax data while owning the investment. For those who like MLPs but would rather purchase shares in corporations there is an alternative. Kinder Morgan and Enbridge Energy, 2 leading MLPs, have set up limited liability corporations, which own units in their partnerships. Each share is backed by one unit and tracks its price moves. Kinder... Read more