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The next level for your investments.


Master limited partnerships (MLPs) are publicly traded partnerships that enjoy a favorable tax treatment because they receive their income from the following qualifying sources: exploration, mining, extraction, refining and transportation of oil, gas and alternative fuels. Because of their potential attractive yields and predictable cash flows, MLPs have gained the approval of income oriented investors since the early 1980s. Their special tax qualification allows these companies to access lower cost of capital and avoid taxation at the corporate level. Investors, known as unitholders, directly benefit from the continuous dividend distributions, which are taxed only at the personal level.


Apart from avoiding corporate level taxes, MLPs' cash distributions to unitholders may come with further tax advantages. If a year’s cash distribution exceeds the partnership’s annual income, the difference is considered a return of capital to the unitholder. Instead of being taxed on the distribution’s fiscal year, capital returns lower the adjusted cost basis in the partnership. Tax on capital gains is deferred until the investor decides to sell.


Our research team continues to monitor MLPs and other legal structures which provide potentially favorable tax treatment. Tax efficient investing is at the heart of Intercontinental’s value proposition.