The Retirees' Dividend Portfolio - John And Jane's August Taxable Account Update: MLP Update

August is one of four months that provides higher-than-normal income for John and Jane and this is largely because all of their energy (specifically pipeline & oil storage) Master Limited Partnerships (MLP) assets provide distributions during February, May, August, and November. These assets are typically most efficient in a Taxable account because there are potentially unattractive tax consequences if held in an IRA (MLP income is taxable even in an IRA when the income provided reaches $1,000 or more).
MLP companies that pay distributions in the month of August in John and Jane's Taxable portfolio include:
Enterprise Production Partners (EPD) Energy Transfer (ET) Phillips 66 Partners (PSXP) This is significantly different than the MLP assets held in the Taxable account during 2018 which included the following:
Buckeye Partners (BPL) Energy Transfer Partners (ETP) Phillips 66 Partners Spectra Energy Partners (SEP) TransMontaigne Partners (TLP) For those who follow my work on the Taxable account it is well-known that I rarely sell a position, and even when I do, it is typically done at the end or beginning of the year (and typically focuses on getting rid of a stock that we consider to be underperforming expectations in favor of a stock that is attractively priced).
So why such a dramatic change in MLP assets? First, the MLP model is attractive for its above-average returns but the US Federal Energy Regulatory Commission (FERC) ruling "disallowed MLPs from receiving... Read more