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I examine the role of heterogeneous shareholder-level taxes in organizational form decisions and in subsequent changes in investor stock ownership. Specifically, I investigate the decision to form a master limited partnership (MLP), which is a tax-advantaged entity for tax-sensitive shareholders, but a tax-disadvantaged entity for tax-exempt shareholders. Consistent with shareholder-level taxes influencing organizational form decisions, I find that firms owned by more tax-exempt shareholders are less likely to carve-out MLPs. Consistent with shareholder-level taxes influencing stock ownership, I find that tax-sensitive investors, on average, decrease their ownership in the parent and hold a relatively larger ownership share in the MLP than in the parent after the carve-out. In contrast, tax-exempt investors own less of the MLP than of the parent. These results provide evidence that firms cater to investors' shareholder-level taxes in making organizational form decisions and that investors sort on tax characteristics inherent to organizational form. JEL Classifications: G32; H24; H25. Data Availability: Data used in this study are available from public sources identified in the paper. [ABSTRACT FROM AUTHOR]

Wayne Shaw's (1990) paper contains two stories of master limited partnerships (MLPs). The main plot shows correlation between dividend cuts and decreases in the wealth of MLP investors. This is interesting because the experiment isolates dividend effects from tax complications. MLP payouts, unlike corporate payouts, do no! affect investors' taxable income. The subplot describes some reasons that people choose to organize economic activity in MLPs instead of corporations. This is interesting because MLPs have not attracted much attention in the accounting literature. The paper omits the usual section entitled "Limitations and extensions of the research." I am cast in the role of antagonist, who must provide one. [ABSTRACT FROM AUTHOR]

This paper examines the impact of dividend distribution decrease announcements on the security prices of master limited partnerships. (MLPs). These firms, whose earnings are not subject to U.S. Federal Income Tax are marketed stressing high dividend yields. Since most MLPs are natural resource firms with only one line of business, cuts in dividend policy by one firm caused by industry-wide factors might impact the market's pricing of similar firms. Therefore, tests of announcement effects are performed not only on the firm itself but also on a portfolio of related firms. Although the announcements were found to be associated with significant unit price reactions for the MLP making the announcement, the price reaction for similar firms was small, indicating only weak support for intraindustry information transfers. [ABSTRACT FROM AUTHOR]

This study examines the unit (stock) price and volume behavior of master limited partnerships (MLP) around the ex-dividend day. Since the dividends of MLPs are not taxable to the unitholder, tax based hypotheses predict no abnormal unit movements around the ex-day. Significant positive excess returns and volume are found before the ex-dividend day, and significant negative excess returns are found on the ex-dividend day. The findings which are not significantly impacted by the Tax Reform Act of 1986 suggest ex-day stock movements are not solely a function of investor marginal tax rates or corporate trading behavior. [ABSTRACT FROM AUTHOR]

The article comments on Sections 864(c)(8) and 1446(f) as added to the Internal Revenue Code of 1986 by Public Law 115-97 on December 22, 2017. Issues discussed are computation of gain or loss, interaction with income tax treaties, effect of the Foreign Investment in Real Property Tax Act (FIRPTA) publicly traded partnership exception, procedures for withholding and deposit of tax, certification procedures regarding foreign or domestic status of transferor, and tiered partnerships.

The article focuses on systems-strategic analysis to explore the role of Delaware's judicial strategy and consequences of that strategy's possible failure. It mentions corporate charter competition and applicable to publicly traded limited partnerships and limited liability companies and democratic process cannot reach the merits of corporate-law reform in Delaware. It also mentions breaches of the fiduciary duties of loyalty and good faith.

The article offers information on a bill "Master Limited Partnerships Parity Act" introduced by the Senator Christopher Coonsmade for qualifying income related to renewable energy in the U.S. Topics discussed include enactment of Omnibus Budget Reconciliation Act of 1987 which deals with rules of taxation under Internal Revenue Code; and history and mechanics of Master Limited Partnerships in the country.

Properly locating assets between retirement and taxable accounts increases the investor's after-tax return. Real estate investment trusts (REITs), master limited partnerships (MLPs), and American depositary receipts (ADRs) offer potentially enhanced diversification benefits to the traditional stock portfolio. Because the tax characteristics of these asset classes are different from publicly traded C corporations, it is often problematic as to whether these asset classes should best be located in a retirement or a taxable account. This article addresses the core tax differences among these asset classes and whether they should be held in taxable or retirement accounts. [ABSTRACT FROM AUTHOR]

Master Limited Partnerships (MLPs) are partnership entities that can he publicly traded on a national stock exchange if they meet certain criteria in the Internal Revenue Code. These criteria include a qualifying income test where most of the partnership's income must be derived from nonrenewable natural resources. These partnerships have become very popular since their creation in the 1980s and have allowed for vast amounts of capital to be spent on infrastructure for non-renewable natural resource extraction and transportation in the United States. First, this Comment explores the history of the MLP and how MLPs currently are structured. Second, this Comment looks at the current capital structure for renewable resources, including geothermal, wind, and solar. Finally, this Comment explores how the MLP structure could be applied to renewable resources in the United States and why those efforts have not worked well thus far. [ABSTRACT FROM AUTHOR]

Despite the market downturn in 2015, the United States is still in the midst of an energy renaissance of huge proportions, thanks largely to investment and innovation that has unlocked new domestic energy supplies. But all-time highs in production and growing energy consumption raise the question of how the nation can reach its full energy potential, meet this demand, and keep pace with the massive infrastructure investment needed to do so. [ABSTRACT FROM AUTHOR]

The article focuses on how the U.S. Congress can provide renewables an equal opportunity to compete with fossil fuels and mentions the potential benefits of extending the Master Limited Partnerships (MLPs) structure to renewable energy.

After the 2008 recession, it is difficult to imagine that the public is investing billions of dollars in publicly traded entities with little regulation of board conflicts and no fiduciary duty protections. Yet, that is precisely the case for more than $284 billion of investments. Investors have flocked to publicly traded limited partnerships (LPs) and limited liability companies (LLCs), collectively known as master limited partnerships (MLPs), because many are high-performing energy companies with a tax preference. MLP market capitalization, while only $14 billion in 2000, topped $284 billion as of February 2016, and more initial public offerings are on the horizon. Dazzled by the possibility of high yields, individual investors are likely unaware that they do not enjoy the same fiduciary duty protections that apply to stockholders of publicly traded corporations. Delaware corporate law offers significant investor protections largely flowing from an unwaivable duty of loyalty. In contrast, Delaware's alternative entity scheme permits the waiver of all fiduciary duties in LP and LLC agreements. Publicly traded LPs are also exempt from listing rules that normally require independent board members. Even where special committees vet conflicted transactions, committee members may have affiliations with the MLP's corporate sponsor and owe conflicting duties to the sponsor and the limited partners. Scholars suggest that "uncorporate" substitutes could theoretically mitigate the absence of fiduciary duties, but empirical research shows that publicly traded MLPs rarely adopt such substitutes. The realities of the MLP marketplace leave investors with only the implied covenant of good faith and fair dealing, which is not a substitute for traditional fiduciary duties. This Article exposes the many obstacles investors have faced in obtaining remedies under MLP agreements. It argues that contractarian theories or legal diversification constructs do not justify the underregulation of publicly traded MLPs. This Article recommends reinstating the duty of loyalty for MLPs and ending the LP exception from board independence requirements. [ABSTRACT FROM AUTHOR]

Under the Tax Cuts and Jobs Act of 2017, real estate investment trusts, master limited partnerships, and private equity managers operating as publicly traded partnerships were granted the favorable treatment of fl ow-through entities. Sounds good, but note there are a few surprises. [ABSTRACT FROM AUTHOR]

Many investors believe that Real Estate Investment Trusts (REITs) distribute only income taxed at the highest rate. There may indeed be ways to invest in REITs and capture tax-favored income, but the tax picture can be complicated. This article sets out the basics. [ABSTRACT FROM AUTHOR]

By some measures, the U.S. public corporation appears to be in the midst of a significant decline, as Michael Jensen predicted 25 years ago in a Harvard Business Review article called 'The Eclipse of the Public Corporation.' Based on an analysis of ten industries during the 48-year period from 1966 through the end of 2013, the author reports a 60% drop in the number of publicly traded U.S. companies, as measured from each of the industry peaks to the end of 2013. Mergers and acquisitions, together with the private-equity transactions hailed by Jensen in his 1989 HBR article, have contributed significantly to this reduction in numbers. But so has the remarkable growth of 'uncorporate' (or pass-through) structures such as Master Limited Partnerships (MLPs) and Real Estate Investment Trusts (REITs), both of which address governance as well as tax problems faced by public C-corporations. But along with this drop in numbers, the author's analysis of the performance of U.S. public companies-as measured both by operating returns on equity and Tobin's Q ratios-also shows a growing separation of the 'best' from the 'rest' over time. Intense global product market competition, the growing benefits (and urgency) of achieving efficient scope and scale, high U.S. corporate income tax rates, and a vigorous market for corporate control are all significantly 'thinning the herd' of public corporations. The 'winners' have been emerging as larger, more efficient, and more influential enterprises than ever before, as the rise of massive U.S. multinationals (and, in countries outside the U.S., state-owned enterprises) over the past two decades has increasingly blurred the line between private business and government. Viewed in this light, the overall trends, both in the U.S. and abroad, suggest an evolution rather than an eclipse of the public corporation. Such trends also suggest that over the next 25 years, the success of the public corporation will increasingly depend on issues such as its ability to resolve conflicts between controlling shareholders (including sovereign governments) and minority shareholders, regulatory (in particular, antitrust) policy, and the role (and investment horizons) of activist shareholders. [ABSTRACT FROM AUTHOR]