Are MLPs a Good Dividend Investment?

MLPs provide income seeking investors an unconventional, but potentially very attractive investment opportunity. Higher than normal yield and above average capital appreciation provide a total return potential that could be quite rewarding.

The double taxation normally associated with corporations is avoided because taxes are only paid when distributions are received. The actual rate of the quarterly required distribution is contractually derived between the unit holders and the general partners. However, each unit holders is responsible for paying their own share of the partnerships income taxes. This can lead to complications and complexity when the time comes to file and pay your taxes. Consequently, this particular asset class may not be suitable for everyone.

Source: Seeking Alpha

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