Master limited partnerships (MLPs), which have been around for more than 30 years, are attractive structures for raising capital for the natural resources sector. For an MLP to maintain its status, at least 90 percent of the MLP’s gross income must be “qualifying income.”
The IRS recently proposed regulations that, for the first time, provide a comprehensive definition of the activities that produce qualifying income in the natural resources sector. These rules are critical to most publicly traded MLPs. Broadly speaking, the new regulations define what activities comprise exploration, development, mining or production, processing, refining, transportation or marketing of natural resources that generate qualifying income.
Please join us as we explore the impacts of these proposed regulations on MLPs, in particular how these regulations differ from previously issued private letter rulings, and how some MLPs might find that the income from their activities that previously qualified under the IRS private letter rulings might no longer qualify. We will discuss what activities will continue to produce qualifying income, what activities may no longer do so, and how MLPs might cope with the change. We will also consider how the proposed regulations might be revised before being finalized, and how affected MLPs might participate in that process. This webinar will also consider the efforts to treat renewable energy activities as producing qualifying income for MLP purposes and the prospects for such a result.