1. What is a Master Limited Partnership (MLP)?

An MLP is a publicly traded partnership. The nature of a partnership provides for the "pass through" of income to its partners. This essentially avoids double taxation on profits often paid by corporations, which pay corporate income tax in addition to its shareholders paying taxes on dividends. Individual investors buy ownership interests, or units, in the partnership through a stock exchange similar to purchasing shares of stock in a corporation. Like other publicly traded entities, MMP files quarterly and annual financial statements with the Securities and Exchange Commission (SEC).

For more information on MLPs, please visit https://eic.energy/mlp-101-the-basics/.

2. Does Magellan pay a cash distribution?

Yes, Magellan consistently pays a quarterly cash distribution. Please visit our Cash Distributions & Qualified Notice page for more information. 

3. Does Magellan have a Direct Stock Purchase Plan (DSPP)?

We do not have a DSPP available at this time. Interested investors should consult a registered stockbroker to purchase units of Magellan (NYSE: MMP). 

4. Does Magellan have a Distribution Reinvestment Plan (DRIP)?

We do not have a distribution reinvestment plan. However, if your units are held in a brokerage account, your broker can arrange for your quarterly cash distributions to be automatically reinvested for you.

5. What are the tax implications?

Magellan Midstream Partners, L.P. will not pay any federal income tax. Instead, each unitholder will be required to report on his income tax return his share of our income, gains, losses and deductions without regard to whether corresponding cash distributions are received. Our unitholders receive a Schedule K-1 during late February to advise of the income they are responsible for reporting on their individual income tax returns. The Schedule K-1s can also be viewed online.

It is the responsibility of each unitholder to investigate the legal and tax consequences under the law of pertinent states and localities of his investment in Magellan Midstream Partners, L.P. We suggest that you consult with your own tax advisor.

6. What are the tax implications for foreign investors?

All of Magellan’s distribution is attributable to income that is effectively connected with a U.S. trade or business. Accordingly, Magellan’s distributions to foreign investors are subject to federal income tax withholding, and foreign investors should expect nominees to withhold at the highest applicable U.S. tax rate plus an additional 10%. Upon the sale of Magellan’s common units by foreign investors, the gross proceeds are also subject to withholding taxes of 10%. Our qualified notice to nominees is available on our Cash Distributions & Qualified Notice page.

7. Can MLPs be held in an IRA?

Although tax-exempt accounts, such as an IRA, may invest in MLP units, virtually all of the taxable income generated by a publicly traded partnership is considered to be unrelated business taxable income (UBTI). As such, this income is currently taxable not only to IRAs but also Keoghs and other qualified retirement plans to the extent it exceeds a $1,000 annual threshold. Please consult with your financial advisor.

8. How do I get a copy of my K-1?

Schedule K-1s are typically available by the end of February. For a copy of your Schedule K-1, please contact Tax Package Support at (800) 230-1032, Monday through Friday from 8 a.m. to 5 p.m. CT or visit www.taxpackagesupport.com/MMP. 

If you have any other questions, please contact Investor Relations or call (877) 934-6571.