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What is a Master Limited Partnership (MLP) & how is it different from plain stock?
I was hesitant to answer this question since I don't own MLP even though I'm aware of how they work.  But hear crickets on this question, so here goes.  I'll try to keep this as non technical as possible. MLPs are partnerships where a shareholder is a partner and liable for the partnership's taxes.  MLPs don't pay corporate tax since the tax burden flows to you, the shareholder. So does that mean like a partnership the partners are liable for the company's actions?  Technically, yes. Has it happened before? No. Of course there are limitations to the liability, but are not definitely shielded in a way normal shareholders are.   MLPs issue a K-1 at the beginning of the year (feb/mar).  The tax calculations are relatively complex and I'm not going to go over that in this post. Generally MLPs are a bad choice for tax-deferred accounts like IRAs since there are tax implications beyond certain limits of distribution (yes even out of an IRA you'll have to pay taxes if above the limit). Not all types of businesses can become MLPs (hey no corporate tax, let's form an MLP!) Only companies engaged in businesses related to real estate, commodities or natural resources can become MLPs.  There are a number of MLPs out there.  The largest is Kinder  Morgan Energy Partners. Hope this helps!