Hello,
Just and update.
Yes — Master Limited Partnerships (MLPs) are treated as publicly traded partnerships for tax purposes, and they’re generally taxed as partnerships rather than corporations if they meet the qualifying‑income rules.
That means they file an annual partnership return with the IRS on Form 1065, which includes a Schedule K‑1 for each partner, no matter how small the ownership stake.
Here’s how it works in practice:
- Form 1065 is the partnership’s master return — it reports the entity’s total income, deductions, credits, etc.
- A Schedule K‑1 is prepared for every unitholder, showing that partner’s share of those items.
- The partnership sends each K‑1 to the IRS and to the partner.
- The IRS uses the K‑1 copy to match against what the partner reports on their own return — so even a single unit in an MLP will generate a K‑1 in the IRS’s system.
This is why even small MLP holdings can create extra tax complexity — the reporting obligation exists for every partner, large or small, and the IRS already has the same K‑1 you receive.
