Master Limited Partnership

Master Limited Partnership means:
a limited partnership in which partnership interests are issued to a “master” limited partner who arranges the sale of the partnership units to the public. Similar to regular limited partnerships, but MLPs shares are traded on the major exchanges, making for a much more liquid investment. Although limited-partnership losses are considered passive, income from an MLP is considered investment income rather than passive income. That means passive losses can't be used to shelter MLP income. For further description, see publicly traded partnership. IRC (check if this IRC provision is current here) §7704.

Description and Definition of Master Limited Partnership

A limited partnership that issues shares that are traded on the open market. This feature makes a master limited partnership a liquid investment that can be converted into cash. Although regular limited-partnership losses are considered passive, income from a master limited partnership is considered investment income rather than passive income. Thus, passive losses can't be used to shelter master limited partnership income.

Resources

See Also

Further Reading

• Master Limited Partnership in the West's Tax Law Dictionary
• Master Limited Partnership in “A Dictionary of Taxation”