Obama Wins: Goodbye GOP, Hello MLP
Wednesday, November 5th, 2008 |
Now that Obama has secured his spot as the nation’s 44th commander and chief, investors have one thing on the brain: taxes. Especially investors in dividend stocks, who see little chance that tax cuts put in place by George W. Bush will be extended. Instead, the tax rate on dividends paid to investors will likely revert to a painful 35%! Isn’t it bad enough that dividends are taxed twice? Ouch.
Investors in Master Limited Partnerships, however, are finding themselves in a much more favorable position. MLP distributions are not actually considered dividends. In fact, they dodge the tax bullet in this case because they are considered a tax-deferred return of capital. So, hold on to your hats - with yields between 7 - 10% MLPs may soon become as popular as the ETF.
